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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Private residence relief: residence before/after period of absence

It is a condition of TCGA92/S223 (3) that both before and after the period of absence there must be a time in which the dwelling house was its owners only or main residence unless they were prevented from resuming residence as a consequence of their or their spouse or civil partner’s employment requiring them to live elsewhere, see below. The periods of residence do not have to be immediately before and after the period of absence.

The legislation does not specify how long the period of residence must be. CG64435 explains that it is quality of occupation rather than length of occupation which determines whether a dwelling house is its owners residence. Similar considerations apply here. It is not possible to set a minimum period of occupation which will be enough to allow relief for a period of absence. Both before and after the period of absence the dwelling house must be its owners home and not merely occupied for a temporary purpose.

CG64985 explains that if a dwelling house has been used as its owner’s only or main residence at any time, the final period of ownership will always qualify for relief. That does not mean that the final period of ownership will qualify as a period of only or main residence after a period of absence and therefore allow relief for that period of absence. The period of absence must be followed by an actual period of use of the dwelling house as its owner’s only or main residence.

This is illustrated by the example at CG65067.

S223 (3B) & ESC D4

TCGA92/S223 (3B) (b) & (c) provide for two circumstances where the requirement that there must be a period of occupation of the dwelling house as its owner’s only or main residence following a period of absence does not have to be met. These are:

  • Where the individual is prevented from resuming residence as a consequence of the situation of their place of work or due to a condition imposed on them by the terms of their employment requiring them to reside elsewhere to secure the effective performance of their duties, or
  • Where the individual lived with a spouse or civil partner who was prevented from resuming residence as a consequence of the situation of their place of work or due to a condition imposed on them by the terms of their employment requiring them to reside elsewhere to secure the effective performance of their duties.

The provisions of S223 (3B) apply to disposals made on or after 6 April 2009, see CG65046.

For disposals prior to 6 April 2009 ESC D4 applies to give the same effect.

The operation of these provisions is illustrated at CG65067.

Use of residence during period of absence

It does not matter how the residence is used during a qualifying period of absence. For example, it may be let without any loss of relief.