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What is Private residence relief?
Private residence relief removes Capital Gains Tax on the part of a gain that relates to time a property was your only or main home. If you lived in a property before letting it, part of the gain can be tax free.
Why it matters to landlords
The final 9 months of ownership usually count as if you lived there, even if you had moved out. Letting relief now only applies where you shared the home with your tenant.
The relief is worked out by time, so keep proof of when you lived there, such as council tax and electoral roll records.
Example
Jo owned a flat for 10 years, lived in it for the first 4 and let it for 6. Roughly 4 years and 9 months of the gain is covered, and the rest may be taxable.
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