CGT on Selling a Former Home: Private Residence Relief and Letting Relief 2026/27

How does Private Residence Relief work on a former home?

The relief is time-based. You work out the gain over the whole period of ownership, then exempt the fraction that relates to periods that count as your main home.⁴

Relief = gain × (months lived there + qualifying absences + final 9 months) ÷ total months owned

Periods are not double counted: if you were living there during the final 9 months anyway, they add nothing extra. HMRC works this out to the day where the dates matter, so keep the dates you moved in and out.

Worked example: a former home let out after moving

Using the figures from GOV.UK's example: Mark bought a house, lived in it for 7½ years, then moved in with his partner and let it for 7½ years before selling. The gain over the 15 years is £120,000.¹ He has no other gains and is a higher-rate taxpayer in 2026/27.

Mark must file a 60-day UK property return and pay within 60 days of completion. Had his income left him £10,000 of basic-rate band, £10,000 would be taxed at 18% and the bill would be £11,640. Before 6 April 2020 he could also have claimed up to £40,000 of Letting Relief; for sales since then he cannot, because he did not share the house with his tenants.

Before you pay HMRC, check every cost, loss and relief is in your figures: get your CGT Check report, £4.99 →

When does Letting Relief still apply?

Only where you let part of your home while you were living in it, for example a self-contained part of the house or rooms you let to a tenant.² A lodger who shares your living space, or a family member paying housekeeping, does not count as letting at all, so full relief continues.

GOV.UK's example: a tenant rents a large bedroom that is 10% of the home. On a £75,000 gain, Private Residence Relief covers 90% (£67,500). The £7,500 for the let room is covered by Letting Relief, because it is the lowest of £67,500, £40,000 and £7,500. No tax is due.²

Letting Relief does not cover any part of the gain from periods when the home stood empty.

Which absences count as living there?

• Up to 3 years in total, for any reason.
• Up to 4 years where you had to live elsewhere in the UK for work.
• Any period working outside the UK.

You must have lived in the home before and after the absence, unless your work prevented you from going back.³ If you never moved back, the absence reliefs usually fall away and only the final 9 months help. You also cannot claim them for a period when another property was your nominated main home.

What if you had two homes at the same time?

You can only have one main residence at a time, and a married couple or civil partners living together have one between them. If you had two homes, you can nominate which counts by writing to HMRC within 2 years of the combination of homes changing, signed by all the owners.¹ Without a nomination, HMRC decides on the facts: where you actually lived, voted, were registered with a GP, and so on. Selling the home that was never your main one is covered in our second home guide.

What else can reduce the gain?

• Allowable costs: Stamp Duty and legal fees when you bought, improvements still in the house, and selling costs. See allowable costs.
• Joint ownership: each owner has their own £3,000 allowance and basic-rate band.
• Losses on other assets in the same year, or brought forward.

Relief can also be restricted: if part of the home was used only for business, if the garden and grounds exceed 5,000 square metres, or if you bought the property mainly to make a gain.¹

Do you need to report the sale?

If relief, costs, losses and the £3,000 allowance cover the whole gain, a UK resident does not file a 60-day return.⁵ If any tax is due, report and pay within 60 days of completion: our 60-day return guide walks through each step, and the return has a section for Private Residence Relief.

Frequently asked questions

This page is general information, not tax advice. It follows GOV.UK's "Tax when you sell your home" guidance and Helpsheet HS283 as checked on 18 October 2026. Complex histories of absence, nominations or business use may need professional advice.