Principal Private Residence Relief can be extended to a second residence in a individuals ownership for any period during which a dependent relative occupies the residence rent free. Therefore for the period that such a relative occupies a residence other than the individuals main residence, a capital gains tax (CGT) exemption can be claimed for both parties.
A dependent relative includes a relative of the individual or of his/her wife/husband. The relative must be incapacitated by old age or infirmity from maintaining himself or herself in order to be deemed dependent. A dependent relative can also include:
- The widowed mother or father, whether or not incapacitated, of the individual or of his/her wife/husband, who is maintained by the individual, or
- A person who is the father or mother of the individual or of the wife or husband of the individual and is a surviving civil partner who has not subsequently married or entered into another civil partnership.
There is no income test for the above reliefs.
The principal private residence exemption from CGT can only be extended to include one additional residence irrespective of whether or not individual is married.
If you need advice on this area please get in touch with us and call FMB on 01 645 2002.
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