Private Residence Relief Explained: Occupation, Absences and the Final 9 Months

The mechanics are simple. Work out your total gain in the normal way, then exempt the proportion given by periods of occupation divided by the total period of ownership. Periods of occupation means every period the house was your only or main residence, every period of deemed occupation under the absence rules below, and always the final 9 months of ownership (HS283, GOV.UK).

Full relief, meaning no CGT and usually nothing to report, needs all of the following: one home, lived in as your main home for the whole time you owned it, no part let out, no part used exclusively for business, grounds under 5,000 square metres, and not bought mainly to make a gain (Tax when you sell your home, GOV.UK). Miss any of those and you move into the apportionment world this guide covers.

Whatever remains chargeable after PRR is taxed at the residential property rates, 18% within your basic rate band and 24% above it, after the £3,000 annual exempt amount for 2026/27 (CGT rates, GOV.UK). Married couples and civil partners can only count one property between them as their main home at any one time.

The single most misunderstood point in PRR is that there is no minimum period of occupation. HMRC's Capital Gains Manual confirms that residence takes its ordinary meaning, the dwelling in which a person habitually lives, their home, and cites Moore v Thompson for the proposition that even occasional and short residence can make a place a residence, while stressing it is always a question of fact and degree (CG64427, HMRC).

In practice: six weeks of genuine home life can qualify, and two years of camping in an empty property while your real life continues elsewhere may not. The question is whether the property actually became your home, the dwelling in which you habitually lived. Facts that persuade: furniture and possessions moved in, electoral roll registration, redirected post, utilities and council tax at the address, your family living with you, and above all an intention to stay rather than to sell or let. Facts that undermine: the property was already on the market when you moved in, the old home stayed furnished and you returned to it at weekends, or the stay was engineered around a disposal.

None of these items is decisive alone. A short stay cut off by a genuine change of circumstances, a relationship ending or a job relocation, can still be residence; a long stay that never had the quality of a home can fail. Keep the evidence: brief-occupation claims are exactly where HMRC enquiries concentrate.

One helpful deemed occupation rule sits at the start of ownership: if you could not move in because you were unable to sell your old home, the property needed refurbishment or alteration, or you were building it on land you owned, up to the first 24 months is treated as if the house had been your only or main residence (HS283, GOV.UK).

The final 9 months of ownership always qualify for relief, regardless of how you use the property in that time, as long as the house has been your only or main residence at some point (HS283, GOV.UK). Move out, let it, leave it empty, live abroad: the last 9 months are exempt anyway, which is what stops a normal house sale, moving to the new home before completing on the old, from creating a taxable sliver of gain.

Two qualifications. First, the period is 36 months, not 9, for owners who are disabled or in long-term residential care, provided they have no other relevant right in relation to a private residence. Second, the exemption does not extend to any part of the home you never lived in because it was let out or used for business. The general final period fell to 9 months on 6 April 2020, so older worked examples found online will overstate the relief.

Certain periods when you were not living in the house are treated as if you were, under section 223(3) TCGA 1992, and they are the difference between a CGT bill and none at all for anyone who worked away or spent years abroad (CG65030, HMRC).

Three points on how these work. First, the categories stack, and where a period fits more than one category HMRC applies whichever treatment is more favourable (CG65030, HMRC).

Second, the sandwich condition: the house must be your only or main residence at some time before the absence and at some time after it. The return leg catches people out, because selling directly from abroad without reoccupying fails it on the face of things. There is a statutory relaxation for the work-related heads: if your place of work, or a condition reasonably imposed by your employer, prevented you from returning, the after condition is treated as met, and the same applies where it is your spouse or civil partner whose work prevents the return (s223(3B), CG65046, HMRC). The relaxation does not rescue the 3-year any-reason head, which genuinely needs reoccupation.

Third, no other qualifying residence: an absence only counts if no other property was your main residence for relief purposes during it. Buy a home abroad and treat it as your main residence, or nominate another UK property, and the absence rules cannot double-count the old house. For the keep-or-sell decision on a move abroad, see selling versus renting out your UK home.

Before 6 April 2020, lettings relief sheltered up to £40,000 of gain per owner (£80,000 for joint owners) on a home that had been let out after you moved away. That version is gone. For disposals from 6 April 2020, lettings relief only applies where part of the house was let as residential accommodation at the same time as another part was your only or main residence: in other words, you were living there alongside your tenant (CG64710, HMRC).

Where it does apply, the relief is the lowest of three numbers: the PRR you are already getting, £40,000, and the chargeable gain attributable to the letting (HS283, GOV.UK). But the shared occupancy condition means the classic fact pattern, live in the house for a few years, move out, let the whole house for a decade, sell, now gets no lettings relief at all: HMRC is explicit that relief is not available for any period during which the whole dwelling house was let. If a computation or online calculator still shows £40,000 of lettings relief on a wholly let former home, it is applying pre-2020 law and the bill is understated.

A related warning: if the letting years were never declared for income tax, the CGT disposal will surface them, because HMRC sees the letting history in the PRR computation. Sorting the income tax position first through a disclosure, usually the Let Property Campaign, is almost always cheaper than waiting for HMRC to connect the two.

Where you have two or more homes actually in use as residences, only one can attract PRR at a time, and you can choose which by nominating it: a letter to HMRC, signed by all owners of the property, within 2 years of the date your particular combination of residences first arises. Every time the combination changes, a fresh 2-year window opens (Nominating a home, GOV.UK).

The nomination only chooses between properties genuinely used as residences: a pure buy-to-let you have never lived in cannot be nominated into relief. Between two real homes it is powerful: you can nominate the home standing at the larger gain even if you spend fewer nights there. Miss the 2-year window and the question is decided on the facts of where your main home actually was, a weaker position and a common source of disputes. While a nomination is in force on one property, no other property accrues relief for the same period, apart from periods that qualify automatically such as the final 9 months. Married couples and civil partners share one main residence between them, so the choice is made jointly and binds both properties.

Since April 2015, non-residents pay UK CGT on disposals of UK residential property, with their own reporting regime. PRR survives the move abroad, but with an extra hurdle: a tax year of non-residence only counts as occupation if you, or your spouse or civil partner, spent at least 90 days in the UK home during that tax year (Tax if you live abroad and sell your UK home, GOV.UK). Fail the 90 days and the year drops out of your PRR fraction entirely, however genuinely the house remains your home in every other sense. You also need to nominate the property as your main residence when you report the disposal.

The relief still fails for a year in the usual ways: to the extent the property was let out, partly used for business, or the grounds exceed 5,000 square metres. The final 9 months and the s223(3) absence rules apply to non-residents in the same way as to everyone else, so a posting abroad can still qualify under the overseas employment head even where the 90-day test is failed, provided the sandwich conditions or the work-prevented-return relaxation are met.

Rebasing softens the history: as a non-resident you are generally only taxed on the gain arising since 5 April 2015 on a UK residential property (GOV.UK). For long-held homes this often matters more than PRR itself. Finally, the deadline: a non-resident must report the disposal of a UK home to HMRC within 60 days of completion, whether or not any tax is due; see our guide to the 60-day CGT rule for non-residents. Your residence position itself is tested under the Statutory Residence Test.

The commonest fact pattern we see: a first home genuinely lived in for a short period, kept and let after a move, sold years later. An owner bought a house in January 2010, lived in it as her only home until September 2011 (20 months), then moved in with a partner and let the house continuously until selling in January 2026. Total ownership 192 months, gain £200,000, higher rate taxpayer, 2026/27 annual exempt amount unused.

Three things to notice. First, the 20 months of genuine occupation were worth real money: without them, and the final period exemption they unlock, the whole £200,000 would have been chargeable, so the brief period as her home saved about £7,250. The quality of that occupation, electoral roll, bills, possessions, an intention to stay, is what an HMRC enquiry would test. Second, lettings relief contributes nothing, because she never shared the house with her tenants; the same sale before 6 April 2020 would have attracted up to £40,000 of it. Third, the absence rules cannot help, because the house was never her residence again after September 2011 and another property was her main home throughout the let period.

Vary the facts and the number moves sharply. If the move had been an overseas posting with all duties abroad and she had reoccupied on return, or been prevented from reoccupying by her work, the entire absence could have qualified and the gain could have been fully exempt. PRR is a computation where the sequencing of dates, not the size of the numbers, decides the bill. Selling from abroad, the same computation would also collide with the 90-day rule and the 60-day reporting deadline, and a UK resident selling a former home overseas faces the mirror-image questions in our guide to selling property abroad.

PRR computations are precise, evidence-driven work: we reconstruct the occupation timeline, test each period against the statute and HMRC's manual, apply the absence rules in the most favourable permitted way, and prepare the computation so the claim survives an enquiry. Where a sale is still ahead, timing advice, when to complete, whether to reoccupy, whether a nomination window is still open, often changes the outcome. We also handle the 60-day return for non-residents and any letting disclosure that needs to precede the sale; where a property is passing within the family rather than being sold, see our guide to CGT on gifts and family transfers.

Everything is on fixed fees agreed upfront: personal tax returns from £350, non-resident and expat work from £550, and complex cases from £750. If you are selling, or wish you had planned before selling, book a free 30-minute clarity call or see our UK property service page for how the engagements work.