The short version: Private Residence Relief means you don’t pay Capital Gains Tax when you sell your main home. As long as you’ve lived in it as your primary residence throughout, any profit is tax free.
What are the conditions?
It must have been your only or main home for the whole time you owned it. You can’t have rented it out completely (letting a room while you live there is usually fine). It can’t have been used exclusively for business. The grounds must be under a certain size. And you can’t have bought it just to make a profit.
Do you need to claim it?
No. If you qualify, the relief applies automatically. You don’t need to report the sale to HMRC at all.
What if you didn’t live there the whole time?
You might get partial relief. The final period of ownership usually qualifies even if you weren’t living there. But you’ll pay CGT on the portion relating to periods when it wasn’t your home.
What about second homes?
You can only have one main residence at a time for Private Residence Relief. Second homes and buy to lets don’t qualify.
Selling a property and not sure if you’ll pay CGT? Let us check your position.
