CG64990 - Private residence relief: final period exemption: cannot exceed gain

If the dwelling house is used for part or all of the final part of the period of ownership as its owners only or main residence, that period may qualify for relief both as a period of residence and as part of the exempt final period. This period should only be counted once in computing relief. This is illustrated by the example at CG64991.

An individual acquires a dwelling house in May 1984 and uses it as her only or main residence from May 1984 to June 1986 and again from August 1988 to June 1991. The house is sold in November 1993 and a gain of £50,000 before private residence relief arises.

The relief is computed as follows -

• Period of ownership May 1984 - November 1993 = 115 months
• Period of only or main residence

May 1984-June 1986 = 26 months

and August 1988-June 1991 = 35 months

• final period exemption

July 1991-November 1993 29 months

The chargeable gain is £10,869 before annual exempt amount.