The short version: Lettings Relief is a Capital Gains Tax relief for people who sell a property that was once their main home and was also let out to tenants while they still lived there.
When does it apply?
You need to have lived in the property as your main home at some point. And you need to have shared it with tenants while you were also living there. If you moved out completely and then rented the whole place, Lettings Relief doesn’t apply.
How much relief can you get?
The relief is capped. You can claim the lowest of: the amount of Private Residence Relief you’re getting, a fixed maximum (check gov.uk for current figures), or the gain you made while the property was partly let.
What about Private Residence Relief?
If the property was your main home the whole time you owned it, you get full Private Residence Relief and pay no CGT when you sell. Lettings Relief is an extra top up for the specific situation where you were both living there and renting part of it out.
This has changed recently
The rules tightened in recent years. Lettings Relief used to be more generous. Now it only applies if you shared occupancy with your tenant.
Selling a property you’ve lived in and let out? Get in touch to make sure you’re claiming everything you can.
