CG64710 | Private residence relief: letting: relief for letting of residential accommodation

S223B TCGA92

For disposals on or after 6 April 2020, where relief is restricted because part of the dwelling-house has been let as residential accommodation, a further relief (known as lettings relief) may be available under s223B TCGA92. This further relief is not available for any period during which the whole dwelling-house was let out.

It is therefore important to identify the entity which makes up the dwelling-house for the purpose of s222(1)(a) TCGA92 in order to decide if lettings relief is due under s223B TCGA92, see CG64230+.

It is also important to properly identify the entity making up the dwelling-house where the property is used for a trade which involves letting as this may not be a straightforward question. This is covered in more detail at CG64723+.

Lettings relief is due under s223B TCGA92 where

• a gain to which s222 TCGA92 applies accrues to an individual, and

• part of the dwelling-house has at some time in the individual’s period of ownership been their only or main residence, and

• during that time another part of the dwelling-house has been let out by the individual as residential accommodation, and

• a chargeable gain arises by reason of that letting, see CG64721.

The amount of the relief is the lowest of:

• the amount of private residence relief given by s223(1) to (3) TCGA92,

or

• £40,000,

or

• the amount of the chargeable gain arising by reason of that letting.

S223(4) TCGA92

Where the disposal was before 6 April 2020 and relief is restricted because some or all of the dwelling-house has been let as residential accommodation, an earlier form of lettings relief may be available under s223(4) TCGA92. The main difference in practice between this earlier form of the relief and relief under s223B TCGA92 is that this relief can apply to a period during which the whole dwelling-house was let out.

As with lettings relief under s223B TCGA92, and for the same reasons, it is important to identify the entity which makes up the dwelling-house.

Relief is due under s223(4) TCGA92 where

• a gain to which s222 TCGA92 applies accrues to an individual, and

• part or all of the dwelling-house has at some time in the individual’s period of ownership been let as residential accommodation, and

• a chargeable gain arises by reason of the letting, see CG64721.

The amount of the relief is the lowest of,

• the amount of private residence relief given by s223 (1) to (3) TCGA92,

or

• £40,000,

or

• the amount of the chargeable gain arising by reason of the letting.