Lettings relief increases the amount of the gain that is sheltered from capital gains tax

31st August 2018

Occupying a let property as the only or main residence at some point during the period of ownership will not only shelter the gain relating to the period for which the property was occupied as the main residence (and also that relating to the last 18 months of ownership), but will also entitle a claim to lettings relief to further reduce the chargeable gain.

Lettings relief is available where a gain arises on the disposal of a property which

  • at some time has been the individual’s only or main residence;
  • during the period of ownership, all or part of the property has been let as residential accommodation; and
  • a chargeable gain arises as a result of the letting.

The amount of the relief is the lowest of the following three amounts:

  1. the amount of private residence relief;
  2. £40,000; and
  3. the amount of the chargeable gain arising as a result of the letting.

Please contact your local office for further information if you require further advice on this matter.

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