Work out tax relief when you sell your home

You're entitled to some Private Residence Relief

You need to work out what proportion of your gain you get relief on.

Your calculation will be complex because there are several things that affect your relief. Find out how to get help with working out your tax.

What affects your relief

The relief you get when you sell your property is affected by:

• the time you lived away
• what you used it for

The time you lived away

You don’t get relief for the time you lived away from your home, apart from for certain periods.

What you used it for

If you never lived in the part of your home you let out or used only for business you don’t get any relief on that part.

If at any time you did, you get relief for the time you didn’t let it out or use it for business. You’ll also get relief for the last 9 months you owned the property. This is extended to 36 months if:

• you’re disabled
• you’re in long-term residential care
• you sold it before 6 April 2014

You may get Letting Relief if you let out part of your home.

Example You sell your home and make a gain of £100,000.

You owned your home for 20 years and you lived away for 5 (25% of the time). The time you lived away wasn’t during the last 9 months or another period that qualified for relief. This means the amount you get relief on is reduced by 25% (25% of £100,000, which is £25,000).

The home you’re selling has 10 rooms. You used one room (10% of your home) exclusively for business for 2 years (10% of the period you owned it). The time you used it for business wasn’t during the last 9 months you owned the property. This means the amount you get relief on (£75,000) is reduced by a further 1% (10% of 10%).

You get relief on 99% of £75,000, which is £74,250.

What to do next

There are other rules that may affect the amount of Capital Gains Tax you pay. Work out if you need to pay.

Your answers

Start again

• 1. Do you own more than one home?: No
• 1. Do you own more than one home?: Change
• 2. Are the grounds of your home bigger than 5,000 square metres, including the buildings?: No
• 2. Are the grounds of your home bigger than 5,000 square metres, including the buildings?: Change
• 3. Have you lived away from your home?: Yes, I've lived away
• 3. Have you lived away from your home?: Change
• 4. Have you let out any part of your home or used any part exclusively for business?: Yes
• 4. Have you let out any part of your home or used any part exclusively for business?: Change