CG64702 | Private residence relief: letting: lodger

SP 14/80

SP 14/80 sets out the position for CGT purposes where an individual lets out all or part of their home. The Statement of Practice says that where a lodger lives as a member of the owner’s family, sharing their living accommodation and taking meals with them, no part of the accommodation should be treated as having ceased to be occupied as the owner’s main residence. The relief should not be restricted in those circumstances.

The reference to a lodger is important. The domestic arrangements of individuals are endlessly variable, and you must aim to operate the statutory code flexibly and fairly. A distinction was intended by the Statement of Practice between a person who takes a single lodger into their home and a person who is running a lodging house as a business. The relief available to the latter should be restricted. You should not consider any restriction of relief where there is a single lodger but should consider doing so to an appropriate extent where there is more than one lodger, whilst bearing in mind that if relief is restricted lettings relief may be due, see CG64710+.