PRR when working overseas

Hello, We bought our property in 2012 and just sold it in September 2023. From 2012 until August 2017 we lived in the property, so will qualify for Private Residence Relief (PRR) during that period. In August 2017 we had to move overseas with my work as a crown servant posted overseas. We lived in government provided accommodation overseas, and rented out our property back in the UK. We only owned one property throughout the whole period I am describing in this post (ie the single property back in the UK). Early in 2021 (while still living overseas) we decided that we would sell the property, as our family had grown and it would no longer be large enough for us when we came back to the UK. We found some buyers but eventually the sale fell through. But our intention to no longer live in the property upon return to the UK remained, given our increased family size. We then moved back to the UK in December 2021 and continued to rent out the property (which was still our sole owned property), while living in rented accommodation elsewhere. Finally, as stated above, we sold the property in September 2023, and now we have to work out the capital gains tax liability. Questions: - We only ever owned one property through this whole period. So can we claim private residence relief for the whole period (or at least for the period we lived in the property, plus the whole period we were overseas when we had no choice but to live away from the property due to my job)? - If that’s not the case, my understanding is that we should at least be able to claim Private Residence Relief for the whole time we were living in the property, PLUS the time we were overseas, up until our intention to live in the property upon return changed. In other words we should be able to claim PRR from when we bought the property in 2012 to August 2017, and then from August 2017 until early 2021, when we put the property on the market for sale. Is that correct? Thanks.

Hi,

You will not be due full residence relief as you have not lived in it for the whole period of ownership. Whilst you were posted overseas, you then chose not to return to the property so the period overseas will only count up to this date. Further guidance is at:

HS283 Private Residence Relief (2023) - Calculating the gain where only partial relief is due

Thank you.

Thanks for that response. You said 'the period overseas will only count up to this date'. Can I just check which date you are referring to? Do you mean we can claim Private Residence Relief while overseas up until the date when we put the property on the market for sale?

Hi Wombat20,

The date in early 2021 (while living overseas) that you decided not to return to the property and sell it instead, is the date that private residence relief would cease.

Thank you.

 

Hello, I have one more question on this issue: my job took me overseas, and so I am clear that I qualify for Private Residence Relief for me, for the period that I intended to return and live in the house. But my wife’s work didn’t take her overseas - she had to go overseas because I went, and we didn’t want to live apart. We weren’t married at the time but we had been living together in a committed relationship for many years. So my question is: does my wife qualify for Private Residence Relief on the same basis that I do?

Hi Wombat20,
Please refer to the period of absence section here:
HS283 Private Residence Relief (2023) Updated 6 April 2023
Thank you.