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HMRC internal manual

Capital Gains Manual

Private residence relief: the entity of the dwelling house: dwelling house in part of a building: flats

The most common example of a dwelling house which is only part of a building is a flat within a block of flats. Each flat is a self contained unit and is itself a dwelling house within a larger building.

There may be occasions where a group of flats can be considered to be one dwelling house. This may be the case if they are

  • All occupied by the owner and his or her family
  • Within the same block
  • Contiguous.

If the flats are in the same block but are on different floors or are separated by other flats, relief should only be allowed in exceptional circumstances. The length of occupation and the use of the flats are important factors in deciding how the flats should be treated and consideration should be given to all of the relevant facts and circumstances.

If the flats are in different blocks or are only connected via the street then they should be treated as separate dwelling houses.