HMRC internal manual

Capital Gains Manual

CG64944 - Private residence relief: ownership period beginning at 31/3/82: example

An individual bought the freehold of house E in July 1975 and occupied it as his only residence until October 1980 when he bought house F which he began to use as a second residence. He nominated house F as his main residence within the time allowed by TCGA92/S222 (5), see CG64495. He sold house E on 1 June 2009 for £200,000. The Valuation Office Agency has agreed that the value of house E at 31 March 1982 was £20,000.

His gain on the disposal of house E is computed as follows.

  Disposal proceeds 200,000
less Value at 31 March1982 20,000
  Net Gain 180,000


For the reason given in CG64943 we accept that because house E was his only or main residence at some time in the period of ownership defined at Section 222(7) he is entitled to relief for the final period of 36 months of ownership*. So the relief due is

36 x £180,000 = £19,878


The chargeable gain will be £160,122 before annual exempt amount.

* For details of the different final periods where relief is due which are applicable for different dates of disposal see CG64985.