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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Private residence relief: change in use: introduction

TCGA92/S224(2)

TCGA92/S224(1) excludes from relief any part of a dwelling house which has been used exclusively for a trade, business, profession or vocation, see CG64660+. More generally, relief is limited by TCGA92/S222(1) to that part of a dwelling house which has been used as its owners residence.

In many cases the dwelling house will have been altered or extended over the period of ownership and its use may have changed frequently. TCGA92/S224(2) applies in these circumstances to adjust the relief ‘in a manner which is just and reasonable’.

TCGA92/S224 (2) applies when

  • there is a change in what is occupied as a persons residence because of

    • reconstruction of a building
    • conversion of a building, or
    • any other reason
  • there is change in use of part of the dwelling house for

    • a trade, business, profession or vocation, or for
    • any other purpose.

The subsection is wide-ranging in its application but its effect is to adjust the relief given by TCGA92/S223.