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HMRC internal manual

Capital Gains Manual

Private residence relief: gains: relocations of employees residences

Employers who relocate their employees around the country will often enter into relocation arrangements with them. Under these arrangements the employee may be able to sell his or her residence to a company at the time of the move and receive a right to a share in any profit that the company subsequently makes on the sale of the property to a third party. CG14970 makes it clear that any sum received by reason of that right does not, in law, attract private residence relief.


For disposals on or after 6 April 2009, TCGA92/S225C applies to relieve the gain accruing on the disposal of an individual’s only or main residence in the situation set out above where,

  • under the terms of the home purchase agreement the individual receives a share of the future profit within three years of the individual’s initial disposal, and
  • that receipt would ordinarily be treated as a disposal falling within TCGA92/S22

The receipt is treated as a gain attributable to the initial disposal by the individual of his or her only or main residence, but the gain will accrue to that individual at the time the sum is received. Relief is due on the receipt in the same way as on the initial disposal.

Where the employee owns his or her home jointly, the relief also applies to the other joint owner(s).

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For disposals before 6 April 2009, ESC/D37 applies to relieve the gain in a similar way.