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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Private residence relief: final period exemption

TCGA92/S223 (1), (2), (5) & (6)

If a dwelling house has been used as its owner’s only or main residence at some time in his or her period of ownership then the following final part of the period of ownership will always qualify for relief.

  • For disposals on or after 10 December 2003, where the acquisition cost of the dwelling house is unaffected by gift hold-over relief under TCGA92/S260, 36 months.
  • For disposals on or after 10 December 2003, where the acquisition cost of the dwelling house is reduced by gift hold-over relief under TCGA92/S260, only that part of the final 36 months of ownership falling before 10 December 2003 (see example in CG64935).
  • For disposals on or after 6 April 2014 the final period of ownership that qualifies for relief is reduced to 18 months, unless the disposal is by disabled persons or persons in care homes etc. and TCGA92/S225E applies see CG64986.

The purpose of the final period exemption is to help the owner occupier who puts his or her house up for sale but cannot find a buyer. The current final period exemption is 18 months If details of final periods for disposals before 10 December 2003 are required you should contact Capital Gains Technical Group.

The exemption applies in any event

Although the final period exemption is intended to apply where there are difficulties finding a buyer, it applies ‘in any event’, TCGA92/S 223 (2). So exemption will always be available for the final period if the dwelling house has been its owners only or main residence at some point in their period of ownership, regardless of the use of the dwelling house in that final period.