A Win for Caregivers: PRR Relief Granted on Multiple Properties
In a recent case, a caregiver who moved into his parents’ home to care for his ailing father successfully claimed Principal Private Residence Relief (PRR) on not one, but two separate property disposals. The First Tier Tribunal (FTT) sided with the taxpayer, confirming that his move for caregiving purposes didn’t disqualify him from claiming relief on his own residences.
What Is Principal Private Residence Relief (PRR)?
PRR is a valuable tax relief allowing individuals to sell their main home without incurring Capital Gains Tax (CGT). To qualify, the property must be the taxpayer’s only or main residence. This case expands on what HMRC considers a main residence, especially in exceptional caregiving circumstances.
The Background of the Case
The taxpayer had two properties, which he lived in before moving into his parents’ house to provide full-time care for his father. During this caregiving period, he neither owned nor lived in any other property. HMRC challenged his claim of PRR on the disposals of the two earlier residences, arguing that he wasn’t occupying a home of his own at the time of sale.
Tribunal’s Decision: A Broader View of ‘Residence’
The tribunal ruled that the taxpayer’s absence from his own home was due to compassionate and justifiable reasons. His stay in the parental home, though not owned by him, was not voluntary in the typical sense—it was driven by necessity. Therefore, the properties previously occupied by him still qualified for PRR.
This case illustrates how the tribunal considers real-life circumstances, particularly when individuals act out of moral obligation, such as caring for a parent. The concept of residence was interpreted with a flexible, human-centred approach.
Implications for Taxpayers and Caregivers
This outcome is a significant reassurance for caregivers. If you move into a relative’s home for caregiving and leave your property, you may still be eligible for PRR on your previous home upon its sale. However, each case is fact-specific, and the timing and nature of the occupation must be carefully documented.
At Care Accountancy, we guide clients through complex tax rules, ensuring no relief is missed, especially in compassionate circumstances.
Key Takeaway: Document and Justify Your Circumstances
The ruling highlights the importance of maintaining clear records of your living arrangements and the reasons behind them. Demonstrating intent, necessity, and previous occupancy can help defend your PRR claim.
If you’re unsure whether your property qualifies for PRR under unusual circumstances, contact us today for personalised advice.
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