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HMRC internal manual

Capital Gains Manual

Private residence relief: non residential use: part of house used for business

TCGA92/S224 (1)

TCGA92/S224 (1) states that relief shall not apply to any part of the dwelling house which is used exclusively for the purpose of a

  • trade
  • business
  • profession,


  • vocation.

The gain on the disposal of the dwelling house is to be apportioned between the part of the dwelling house used exclusively for one of the purposes listed above and the part used as a residence. Only the proportion of the gain apportioned to the residential part will attract relief. This is illustrated by the example at CG64674.

If, during the period of ownership, there has been a change in the part of the dwelling house which has been used for these purposes TCGA92/S224(2) provides that

‘the relief given by Section 223 may be adjusted in a manner which is just and reasonable’.

An explanation of how to carry out this adjustment is at CG64760+.