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HMRC internal manual

Capital Gains Manual

Private residence relief: gains: introduction

Private residence relief may apply to a gain accruing to an individual on the disposal of, or of an interest in,

  • A dwelling house which has been the individual’s only or main residence at some time during their period of ownership (see CG64920),
  • A part of a dwelling house which has been the individual’s only or main residence at some time during their period of ownership (see CG64920),
  • Land which the individual occupies and enjoys as the garden and grounds of that dwelling house.

‘An interest’ in this context means a legal or equitable interest, which includes a joint interest (for example a percentage interest in a property jointly owned by a Housing Association) and any leasehold interest as well as the freehold interest. So a legal or equitable interest will include a tenancy but will not include a residence occupied under licence

A licence is a permission to reside in a property which may be contractual, for example in a hotel or lodgings, or it may be gratuitous, for example staying with family or friends.

A disposal of a residence may be taken to include any part disposal or deemed disposal, for example a capital sum derived from the residence. So an individual may be entitled to relief in any of these circumstances.