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HMRC internal manual

Capital Gains Manual

Private residence relief: what to look for

The main limits to relief are

  • the size of the garden or grounds and
  • the extent to which the residence has not been used as its owner’s only or main residence.

Common reasons for restricting relief include

  • Garden or grounds exceed 0.5 hectares. The sale price may indicate that the property sold was substantial and so may have had garden or grounds larger than the permitted area. If so relief may be restricted and the instructions at CG64800+ should be followed.
  • Property not only used as a home. There may be information available that the property has partly been used as business premises or for some other non qualifying use. If so relief may be limited and the instructions at CG64660+ should be followed.
  • Period of non-residential use by the owner. You may have information that the property has not been wholly used as the owner’s residence through the period of ownership, for example, it may have been let for a time. If so relief may be limited and the instructions at CG64710+ should be followed.
  • Second home. It may be apparent from information available that at some time in the period of ownership the owner may have had two homes. If so relief may not be due and the instructions at CG64485+ should be followed.

Use the information available to you to decide if a restriction to relief is likely.