In this week’s Q&A series, Kiya Jacobs, tax advice consultant at Croner Taxwise, explains whether principal private residence relief (PRR) is available when a property is held in trust and capital gains tax liability
My client is the life tenant of an interest in possession trust that was created on his wife’s death. Half of the client’s main residence is in this interest in possession trust and the other half he owns personally. If this property is sold will there be capital gains tax (CGT) due?
There will be two disposals here for capital gains tax purposes that we need to consider.
Firstly, your client’s individual disposal. If he has always occupied this property as his main residence for the full period of ownership, subject to the last nine months of ownership, then the capital gain would be covered by principle private residence relief – section 222 TCGA 1992.
Therefore, no capital gains tax would be due and in addition there would be no need to submit an online property account for residential disposals within 60 days if no liability has arisen here – paragraph 4 Sch. 2 FA2019.
