ACCA · Question 29 · Chargeable gains for individuals
Section B - Case 3 (Oakfield Farms)
Before his death, Arthur sold a farmhouse that he had lived in for 10 years. For the entire 10 years, he used one room (representing 10% of the house) exclusively as a farm office.
How will Principal Private Residence (PPR) relief apply to the capital gain on the sale of the farmhouse?
Answer options:
100% of the gain is exempt because it was his main residence.
PPR relief will be restricted; 90% of the gain will be exempt, and 10% will be chargeable.
No PPR relief is available because part of the house was used for business.
The entire gain is chargeable, but Business Asset Disposal Relief can be claimed on the 100%.
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