As a general rule, there is no Capital Gains Tax (CGT) on a property which has been used wholly as a main family residence. This relief from CGT is commonly known as Private Residence Relief. Conversely, an investment property that has never been used as a main residence will not qualify.
It is not uncommon for taxpayers to own more than one home, and there are a number of issues that home owners should be aware of. For example, an individual, married couple or civil partnership can only benefit from CGT relief on one property at a time. It is possible to choose which property benefits from a CGT exemption, but there are special rules which determine the timing and frequency of changing an election which will need to be considered.
However, there is an Extra Statutory Concession (ESC – D49) that under certain circumstances will allow for CGT relief for two dwellings over the same period.
The ESC applies under the following circumstances where there is a delay in taking up residence in a new home:
This ESC allows for relief for up to 12 months and can be extended to 24 months under exceptional circumstances.