Capital Gains Manual: Reliefs: Private residence relief: ownership period: introduction
Private residence relief will relieve the gain accruing on the disposal of a dwelling house to the extent that, during their period of ownership, it has been used as its owner’s only or main residence.
There are statutory rules at TCGA92/S222 (7) and at TCGA92/S223 (7) which determine the date on which the period of ownership is taken to begin. These rules only apply for the purpose of computing the amount of private residence relief due. They do not affect the computation of the gain itself.
The definitions of the period of ownership in Section 222(7) and in Section 223(7) are different and may not coincide. They are applied in different circumstances for different purposes.
Relief is available in principle if the dwelling house is within Section 222. A dwelling house will be within Section 222 if it has been its owners only or main residence at any time in the period of ownership defined at Section 222(7). For this purpose the period of ownership is taken to begin at the date of the first acquisition on which the owner could have incurred expenditure deductible in computing the amount of the gain, see CG64930-CG64935.
If the dwelling house is within Section 222 the amount of relief which is due is governed by Section 223. For a disposal before 6 April 1988 the period of ownership for the purpose of computing the amount of relief cannot include any period before 6 April 1965. For a disposal on or after 6 April 1988 the period of ownership for that purpose cannot include any period before 31 March 1982, see CG64940 - CG64944.
Where the whole or part of the gain to which section 222 applies is an NRCGT gain (see CG73700+) the period of ownership does not include any period before 6 April 2015. However under section 223(7A) the definition of period of ownership above does not apply where the individual has made an election for the retrospective basis of taxation to apply.
However, no private residence relief is due if
- the owner acquired the dwelling house on or after 10 December 2003, and
- the acquisition cost of the dwelling house (for CGT purposes) is reduced by gift hold-over relief under TCGA92/S260 (see CG67030+).