Roll-over relief: furnished holiday lettings: only or main residence
TCGA92/S241 (6) and TCGA92/S241A (8)
The normal rules of roll-over relief are modified where:
- a chargeable gain has been deducted under TCGA92/S152 or TCGA92/S153 from the cost of furnished holiday accommodation,
- a gain to which Section 222 (private residence relief, see CG64200+) applies accrues on the disposal of that accommodation.
On a disposal of that accommodation, private residence relief under Section 223 is restricted to that part of the chargeable gain which exceeds the amount of the gain rolled over.
In January 2005, a property which has qualified as furnished holiday accommodation is disposed of for £340,000 giving rise to a chargeable gain of £55,000. The whole proceeds are invested in the acquisition in September 2005 of a qualifying replacement property at a cost of £450,000. The new property is used as furnished holiday accommodation until September 2008 when it becomes the only residence of the owner. The new property is sold in September 2011 for £500,000. The chargeable gain on disposal is computed as follows.
|Consideration for acquisition of new property||450,000|
|Deduct chargeable gain on disposal of old property||55,000|
|Proceeds of disposal of new property||500,000|
|Gain to which TCGA92/S222 applies||105,000|
|Deduct amount by which cost of new property was|
|Private residence relief is||3 x £50,000 =||£25,000|
|Therefore the chargeable gain is||£105,000 - £25,000 =||£80,000|