ACCA Taxation (F6) Practice Exam

How does the 9-month occupancy rule apply when an owner lets out part of their home?

1. It applies only if the owner has never occupied the property

2. The owner must always occupy the entire home

3. If the owner fully occupied the property once, the 9 months can be deemed

4. It applies only to owners who do not live in the property

The correct answer is: If the owner fully occupied the property once, the 9 months can be deemed

The 9-month occupancy rule is important for determining whether a property qualifies for certain tax reliefs, such as Private Residence Relief. The key aspect of this rule is that it allows a property owner to treat a portion of their home as their main residence for tax purposes, even if they let it out, as long as they have fully occupied the property at some point. When an owner has occupied the property as their main home for any duration, they can still benefit from the 9-month rule upon renting out part of their home. This means that as long as the owner has fully occupied the property prior to letting it out, they are entitled to treat the property as their main residence for the purposes of calculating potential capital gains tax relief when they eventually sell it. Therefore, if the owner has fully occupied the home even once before renting it out, they can use the 9-month occupancy rule to their advantage, allowing for potential tax benefits when they dispose of the property. In contrast, the other options suggest incorrect interpretations of the occupancy requirements and the nature of tax relief eligibility. For instance, stating that the owner must always occupy the entire home misrepresents how partial occupancy can work in conjunction with letting. Similarly, the notions that the rule