ExpertHard2 marksMultiple Choice
ACCA · Question 07 · Chargeable gains for individuals
Section A
Fiona owned a house for 10 years (120 months) before selling it. She lived in it as her main residence for the first 4 years (48 months). She then worked abroad for 3 years (36 months). Upon returning, she lived in a rented flat for 2 years (24 months) while the house remained empty, before finally moving back into the house for the last 1 year (12 months).
How many months of ownership will qualify for Principal Private Residence (PPR) relief?
Section A
Fiona owned a house for 10 years (120 months) before selling it. She lived in it as her main residence for the first 4 years (48 months). She then worked abroad for 3 years (36 months). Upon returning, she lived in a rented flat for 2 years (24 months) while the house remained empty, before finally moving back into the house for the last 1 year (12 months).
How many months of ownership will qualify for Principal Private Residence (PPR) relief?
Answer options:
A.
60 months
B.
96 months
C.
120 months
D.
105 months
How to approach this question
Identify periods of actual occupation. Then identify periods of deemed occupation (working abroad, any reason up to 3 years) ensuring they are preceded and followed by actual occupation. Add the last 9 months rule if applicable (though here she lived in it at the end anyway).
Full Answer
C.120 months✓ Correct
Fiona has actual occupation of 60 months (48 at start + 12 at end). Her absences are 36 months working abroad and 24 months living elsewhere. Because she returned to live in the house, both absences are preceded and followed by actual occupation. The 36 months working abroad is fully allowable. The 24 months is allowable under the 'up to 3 years for any reason' rule. Therefore, all 120 months qualify for PPR relief.
Common mistakes
Thinking the 'any reason' absence and 'working abroad' absence cannot be combined, or forgetting that returning to the property validates the deemed absences.
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