Taxation of Chargeable Gains Act 1992 section 223B

Additional relief: part of private residence let out

Section 223B provides additional capital gains tax relief (known as lettings relief) where an individual lets out part of their main residence as residential accommodation while continuing to live in the property themselves.

• Lettings relief applies only where the owner shares occupancy of their main residence with a tenant — it does not apply where the entire property is let out
• The chargeable gain attributable to the let part of the property is reduced by the lower of the amount of private residence relief available on the disposal, and £40,000
• Only the gain that arises because the let portion is excluded from the owner's main residence qualifies for this additional relief
• Where ownership is treated as beginning with a spouse's or civil partner's earlier period of ownership, the letting conditions are assessed by reference to that earlier owner during their period