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HMRC internal manual

Capital Gains Manual

Private residence relief: example: several periods of absence for different reasons

An individual bought a dwelling house in Bournemouth in January 2003 and lived in it as his only residence. In October 2003his employer required him to work in Glasgow. He lived there in a flat provided by the employer until October 2008. Then his employer transferred him to work in Cologne and also provided a flat there. He ended his employment in March 2010 and toured Europe until November 2010. Then he returned to his dwelling house in Bournemouth and occupied it as his only residence until he sold it in January 2014.

The whole of the period of ownership qualifies for relief for the following reasons

  • January 2003 - October 2003 - Only or main residence
  • October 2003 - October 2007 - four years absence by reason of employment, TCGA92/S223 (3)(c)
  • October 2007 - October 2008 - one year of absence for any reason, TCGA92/S223 (3)(a)
  • October 2008 - March 2010 - period of absence due to employment outside the United Kingdom, Section 223(3)(b)
  • March 2010 - November 2010 - seven months absence for whatever reason, Section 223(3)(a)
  • November 2010 - January 2014 - only or main residence.

The period of absence legislation is applied in the way which is of most benefit to the taxpayer. For example, if the period from October 2003 - October 2007 had been treated as qualifying primarily under Section 223(3)(a) that would have used up the three year allowance and so no relief would have been available for the period between March and November 2010.

The periods of absence are cumulative. In this example, the total qualifying period is seven years two months.