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HMRC internal manual

Business Income Manual

Care providers: qualifying care relief: Capital Gains Tax

S225D Taxation of Chargeable Gains Tax Act 1992 (TCGA 1992)

Carers are normally regarded as carrying on a business. The carer may be required to set aside part of their home exclusively for the use of the person in their care. This could mean private residence relief would not apply to that part of their home by virtue of S224(1) TCGA 1992.

Foster care

As foster children are cared for as part of the family unit, HMRC consider that private residence relief is unaffected.

Shared lives care

For disposals on or after 9 December 2009, the private residence relief rules apply ignoring any use of the house for the purposes of providing shared lives care, see CG64695.

For disposals prior to 9 December 2009, private residence relief was unavailable on that part of the home used exclusively for the care of those placed with the carer. However, a lettings relief will usually be available to offset the private residence relief lost. Therefore, in most cases, no additional Capital Gains Tax arises as a consequence of using the carer’s home for caring (see CG64660 onwards and CG64710).