If you are letting out your former home you will cease to be entitled to PPR, other than for the last 18 months of your ownership. However, a different relief is available called private lettings relief which can cover any capital gain not offset by your PPR. This is a lesser known relief which often gets overlooked however it can be really valuable.
Private letting relief gives relief for the lower of the following three amounts:
- The gain relating to the lettings period
- The gain already exempt under PPR
Lettings Relief cannot turn a gain into an allowable loss or increase an existing loss but it can be used to reduce a gain to or closer to zero.
Remember it is not always bad news; elections and other reliefs such as private lettings relief may be available but if advance consideration is not taken you could suffer tax on a gain you thought was exempt.