Main Residence Relief – MRR

MRR is one of the most favourite relief among general home owners and a topic of discussion among potential property sellers over the dinner table as seen by the accountants in slough.

Just sell your home, pocket the big gain without having to worried about the taxman knocking on your door!

Is it that simple or am I missing something which may come to haunt me later in form of unpaid taxes just when I was to embark on my dream holiday.

Well! There is no need to panic (keep your luggage packed), with careful planning and hindsight a potential tax saving can be scooped even though there are much tighter rules in place compared to past years.

In simplest form MRR is available to any home owner who disposes off their only or main residence where they have lived as their main dwelling. But are there any pitfalls I need to avoid ?

Here are some of the point accountants Windsor would recommend you watch for:

  • Have I been resident in the property for the whole period of ownership and if not, for what reason I have been absent and for how long?
  • Can I conveniently prove to have resided in the property in question?
  • Do I own more than one property solely or jointly with partner or spouse.
  • What were my intentions when I bought my 2nd or 3rd home?

Easier Than Said

We come to the 2nd point before we discussed the first one as you will probably agree with Windsor accountants that things do get trickier sometime, and as we naturally take it for granted that MY house is MY house- there is no question about it. Or is there?

Well, life is full of surprises and you may have to prove beyond doubt that the property on which MRR is to be claimed has been your main permanent residence not only in terms of time of occupancy but also in which fashion, nature of dwelling or the living style. As such was the case between a property owner and HMRC, where it was held that his occupation of the property was more of impermanent nature and that he only sort of camped out for six weeks at the residence rather than taking it as a serious permanent home even though that was the only home he ever owned. CONFUSED?. So are the slough accountants.

See you in a few years’ time

Before you embark on that dream holiday of yours, do you think taxman wont object if you don’t come back to your same residence and decide to move elsewhere once the holiday is over? Think again!.

Even though there are allowable gaps in occupancy often termed as exempt periods, where are deemed to be living at the property even in your absence, effectively reducing the amount of chargeable gains. However for these exempt periods to be of any real bearing on your tax bill, you are required to move back there resuming it as residence like you did before you left. The exempt periods as explained by accountants in Maidenhead are usually:

  • Absence for no more than 3 years in total for any reason.
  • Employment related (any) absences outside UK.
  • A period up to 4 years for work related issues with in UK.

A Real Bargain?

You might have thought that you hit a jackpot when you bought another house at a bargain price but at the expense of loosing a huge capital gain relief without even realising.

Having multiple residences invoke special rules when it comes to MRR. An election has to be made within the two years window of buying your 2nd home as to which property you class as your main residence and the tax relief thereon.

Its rather common sense to elect the property with potentially higher as your main residence.

If no election was made your actual place of dwelling (residence) will attract MRR even though the chargeable gain was lower than the other property. This Obviously, accountants in Marlow appreciate, can be distressing but all is not lost since a re-election can be made at a later date if you happen to buy another property even though it was intended for part time use only.

Since there are properties owned by an individual the time reverses itself back to that lost 2 years window where you would have chosen one of the property as your main residence.

Till Death Do Us Part

This is where tensions can run high as you may start questioning your judgement skills as to why the hell on earth I married to the love of my life. Alas! But only if you knew.

Well, according to the rules married couples can only have one residence as their common dwelling as far as MRR is concerned. So with a hind sight you would have rather let that love flame to burn till you had sold one of your individual’s property which was considered as your main private residence in your own right. Married couples are thus seen as related party, effectively depriving them of MRR on the other property.

Move In, Move Out

Thinking of buying a property, doing it up while living there and then sell it at a premium price before moving elsewhere? Good idea? Perhaps not!

Intensions along with the original accounting treatment play a key role in determining your real status and eventual main residence relief.

When a property is bought with an intension of securing a gain by reselling is classified as property trading on which no MRR can be claimed even though it was also used as private residence before selling.

There are exceptions to this rule, however HMRC will also consider the pattern of serial occupancy in conjunction with an individual’s technical know how and their past property dealings as accountants in Ascot have experienced.

How Can Accounttax Help You?

Helping business and professionals, accountants in slough as small business accountants and tax advisors have a strong idea of the needs and services you require. With our experience and the insight, which accountants in Windsor have gained over the years ensures professionalism with your best interests in mind.

Accountants Windsor can also stay on top of any legislation changes that may happen throughout the year. Ultimately, this will help accountants slough to understand your specific area weather it’s IT Contractors or CIS Contractors, Property landlords or Property developers, Doctors or solicitors, Small business or a limited company, which will then let accountants in Marlow to give you the best possible service that is tailored to you and your business’ needs.

We offer a range of accountancy services local to Windsor, Ascot and maidenhead can help you keep your business successful. Some of these services include:

  • Managing your accounts
  • Offering advice on tax planning and reducing your tax bill
  • Providing payroll and bookkeeping services
  • Helping you with VAT and Digital tax (MTD).
  • Completing and submitting your tax returns on your behalf

Accountants in maidenhead will support you and your business, by doing so you can rest and stop worrying about the business. You can trust our professionals to take care of your business for you. Now you can focus on being exceptional entrepreneur.

Contact Us Today

We pride ourselves on providing excellent services in Thames valley including slough, Marlow and Bracknell areas to businesses and professional clients who are keen to improve their business model. Working with us can ensure that you are well prepared for the future of your business with full control and confidence.

For more information on how we can support you and your practice, call us today on 01753 299 993.

Any reader interested in discussing this topic further can telephone Accounttax on 01753 299 993 in our Windsor office or on 01753 299 993 in our Slough office. You can also email

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The above information is provided for general guidance only without the taking any liability, written or implied, on the part of this firm, its officers and staff. It may not cover your specific business or personal situations, so you should avoid relying on it. It is important that you seek appropriate professional advice where you can provide the full facts of the case and all related documents. This firm or its officers cannot be held responsible for the consequences of any action or the consequences of determining not to act.


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