Shared occupancy and Private Residence Relief

[HarryCat]

Hi,
Regarding Lettings Relief:
“ From April 2020 the relief will change and only be available to those who are in shared occupancy with a tenant. This change will not affect owner-occupiers or landlords who have never lived in the property they are renting out.”

Can anybody explain what “shared occupancy” means? How much time could you spend on holiday whilst still being in “shared occupancy”? Could you for instance travel round Europe and pop back home for a couple of weeks every month or two and still be considered as living in the property?
I think I may be totally misunderstanding something here....
Thanks for any advice
H.

[PinkDalek]

As far as I am aware the proposed changes are not yet enshrined in legislation.

There a few links here which may be worth a read https://www.lemonfool.co.uk/viewtopic.php?p=205226#p205226

One of which is:

Capital Gains Tax: Private Residence Relief: changes to the ancillary reliefs
Summary of Responses
11 July 2019

https://assets.publishing.service.gov.u ... ponses.pdf

This includes:

2.26 As far as absences are concerned, a pragmatic approach will be taken by HMRC. Short holidays, hospital stays and the occasional working away from home by the owner-occupier of the property would not affect the view that occupation of the property was shared. Where there are longer breaks then the period of absence relief provisions, e.g. periods of absence not exceeding three years (see Annex B), may apply.

[Lootman]

I only claimed lettings relief once and it was successful. This was about ten years ago and so rules may have changed. I haven't needed to know since then.

The situation was a residential building that was split into three units. My family took one unit and the other two were rented out. When claiming the relief the key factor (I was told) was that the other two units were "part of the residence". This was interpreted as being that the doors and entryways between the units were all inside the building i.e. there was a shared hallway and front door onto the street.

So we didn't actually share living space with our tenants. We did share the building hallways although not the stairs (of which there were three). The garden was shared as well, and the hardstanding used for car parking (but not the garage). Each unit had its own water, power and council tax, but it was just one property according to the Land Registry, and the heating system was shared, with a single boiler. And just one rubbish service.

We did not live there all the time, but it was our base in the SouthWest while our children were at private school there, and we nominated it as our primary residence for tax purposes.

It's really just an anecdote but hopefully it provides some insight as to how a claim is considered. We paid no CGT on the property upon its sale because of this relief and one other, that I cannot recall right now.

[HarryCat]

Thanks PinkDalek and Lootman,

Annex B of https://assets.publishing.service.gov.u ... ponses.pdf says:

Absence any reason/work- related absence(s)
Certain periods of absence can be treated as residence where a property is occupied as the only or main residence before and after absence. These are as follows:
a. Absences for whatever reason, totalling no more than 36 months in all.
[...]
These reliefs deem the dwelling to be occupied by the person as a residence during the period of absence.


So I think that we should be fine spending a few months at a time abroad over the next year or two looking for somewhere to move to.