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HMRC internal manual

Capital Gains Manual

Private residence relief: letting: introduction

Relief is limited by TCGA92/S222 (1) (a) to that part of a dwelling house which has been used as its owner’s only or main residence. So relief is not normally available for a part of the dwelling house which is let. But there are two exceptions to this rule

  • where a lodger lives with the owner, see CG64702
  • where rooms are occupied by the children or parents of the owner even where they have the exclusive use of a bedroom and / or board is paid

Relief should not be restricted in these two circumstances.

Relief may also be available where accommodation is provided to resident employees such as a nanny or housekeeper.

If relief is restricted because part or the whole of the dwelling house has been let as residential accommodation a further relief may be available under TCGA92/S223 (4), see CG64710+.