Letting relief and illustration

In this lesson

1. 0:00 Private residence relief illustration
2. 0:04 Emma's property transaction overview
3. 0:15 Calculating occupation periods
4. 1:45 Applying PRR relief rules
5. 2:49 Final gain calculation

About this lesson

This worked example walks you through a complex scenario involving multiple periods of occupation and absence, showing you how to apply the rules for work-related absence (four years), temporary absence (three years), and the final period of non-occupation. Understanding PRR is essential for Taxation papers, as it determines how much capital gains tax a taxpayer owes on the sale of their main home. This illustration uses Emma's property journey over 22 years to demonstrate the step-by-step process: calculate your total gain, count the months of qualifying occupation against total months of ownership, then apply the PRR fraction to reduce the taxable gain. The key skill is reading the facts carefully and correctly categorising each period—some absences count as occupation (work-related or temporary), while others don't. By the end, you'll see how a £310,000 gain reduces to just £352 in chargeable gains through proper application of relief, illustrating why getting PRR right matters in real client scenarios.

Duration: 3m