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HMRC internal manual

Capital Gains Manual

Private residence relief: letting: lodger


SP14/80 sets out the position for CGT purposes where an individual lets out all or part of their home. Where a lodger lives as a member of the owner’s family, sharing their living accommodation and taking meals with them, no part of the accommodation should be treated as having ceased to be occupied as the owner’s main residence. The relief should not be restricted at all.

The reference to a lodger is important. The domestic arrangements of individuals are endlessly variable and you must aim to operate the statutory code flexibly and fairly. A distinction was intended by the Statement of Practice between a person who takes a single lodger into their home and a person who is running a lodging house as a business. The relief available to the latter should be restricted. The Board considers that the number of lodgers is a sensible and practical way of distinguishing between these two cases. So you should not consider any restriction of relief where there is a single lodger but should restrict the relief to an appropriate extent where there is more than one lodger. If relief is restricted a further relief may be due under TCGA92/S223 (4), see CG64710+.