Selling your rental property that you once lived in?
Private Lettings Relief and Capital Gains Tax
Frequently, the Private Lettings Relief is missed when calculating Capital Gains tax and it can result in significant tax savings.
If you once lived in your now rental property, it is likely you will be able to claim this relief upon sale, should a gain be made.
By demonstrating the property was once your principal private residence (PPR) you can claim up to £40,000 against the gain. And the good news is that this relief is per person so if the property is held jointly then the relief is doubled to a maximum of £80,000.
In terms of tax savings, using an example where the higher rate of 28% Capital Gains Tax applies and the maximum £80,000 relief can be claimed, results in a tax saving worth £22,400.
Worth not missing this trick!
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