EXAMPLE 2

On 1 June HJ87 Ailce Dought a house in Derby 1m £35.000,

She occupied the house as hor PPR urtil 1 May 1989 when she leH to work in Exeter
In roited accommodation
She returned to the house in Del by on 1 November 1990 and stayed unlil 1 July 1993
whon she left to take up a post in the USA. agam living Ir rented accommodation
She returned to Derby on 1 February 1996 and stayed until 1 December 2005 WhEW

she bought 1'\house In Nottingham and made U'lis her principal private resldenc€'
On 1 February 201 () she 50;d the house in Derby lor £154.000
Compute the c:!'1argeabte gain

Solv tion
£:
Sale proceeds 154,000
less AcquISitioncost ~15aoo
Chargeable galt' (before PPH exemption) 1'9,GOO

Aicos period of ownership o! tile house In Den:.JvIii total Qf c.72 trior 'hs; car. bi'
down into the fol!owing penocJs.
II) 1 June '987 to :30 Apri! 1989 2~j n'ionths Actual reSIC3f1CO
(II) 1 May 1989 to 31 October 1990 1B months WOrKing 'I' UK
32 months Actual roslde'ice
(ili) 1 Novemi)or 1990 to :~O,June 1993
\Ivi 1 July 1993 to 31 January 1996 31 months Vvorkmg abroad
Iv) 1 Februarv 1996 to 30 November 2005 118 months Actual residence
(VI) 1 December 2005 to 31 January 2()10 50 rnonU,ci Living In new PPR

Periods (I) and (v) are exempt since J\lice was actually resident in the property during
those periods (Ii) ,s exempt since f\lice was workH1g e1seWri{)re in the UK, the !our-
Perio,i
year tlmo !lmll has not beer' exceeded and she was resident in the property both betore
and after the absence Similarly, period (jv) is exernpt The last 36 months of o'lvnership
are always exempt. which leaves the first 14 months of periOd Ivi) to conslde' Dunng
Ihese 14 months Alice W(1S claiming anotr1er property to be her PPH, so the p(JflO(1cannot
count as a period of deemed residence and the gain arising dUring these! <\ montil~, is
charSleable. The remaining 25B months bene!it fmm the PPH exemption The chargeable
gain IS therefore as fOiiow$
£.
Totalgan ias above) 119.000
2SB x.\'1 , L. '
I.ess 9 00 0 1t2,875
272
Cfiargeable gam 6125

308

re
lip In relation to the previous example in tillS chapter, assume now Ihat J\llce always lot her
g Derby house when she was not resident there Computo the d1argeable gain.
!ot
. is .J
de Solution

The only chargeabl0 period was a period of 14 months. during which a (Jain of £6 125
arOSf: and durinq WhiCh tho propony was If:!. Lettinq relief is available H~~the lowest of

(a) Hie part of the gHIf1WhiChreiates to the letting period (£6,125) ..

(b) Tho part of the gain which IS exempt because of the PPR exemptions (i:112.875!
iC) 1:40,QOO.

Therefore letting relief is £6.125 and the chargeable gain is reduced to £nil.

309