Letting a property to reduce CGT

If you stop occupying a main residence and decide to rent it out for a period prior to a disposal what impact would this have on CGT when you eventually sold it? Well, the period that you let it for would not usually qualify for principal private residence relief ('PPR' relief). However if you let it out during the three years before you sold it you should be covered by the deemed occupation rule. This states that the last 36 months of occupation are 'deemed occupation' for PPR relief purposes. Therefore letting it during this period would mean that you'd not suffer a loss of relief on the disposal. If the property wasn't previously occupied as a main residence for the entire period of ownership or if it was let for more than the three year period, the PPR relief wouldn't cover the entire gain. In this case letting the property has an additional advantage as it also allows you to claim lettings relief to reduce the capital gain. Therefore letting a property that was a main residence can be advantageous if full PPR relief is not due, as in this case lettings relief can also be claimed.