Private residence relief deemed occupation


Andy Wood

Andy is a practical, creative tax adviser who assists a variety of clients in achieving their personal and commercial objectives in the most tax efficient manner.

Private residence relief deemed occupation

Private residence relief deemed occupation – Introduction

As stated previously, private residence relief is potentially available in relation to both:

  • Actual occupation; and
  • Periods of ‘deemed occupation’ – in other word, although you didn’t live there, the statute allows us to pretend you did.

This latter category is still dependent on the fact that the property was a main residence or was subject to a private residence relief election under TCGA 1992, s222.

The various ‘reliefs’ that provide for deemed occupation can be split in to two categories:

  • All cases – Apply in any case where the property has been a main residence; and
  • Sandwich reliefs – where the property was occupied before andafter the period of absence

Private residence relief deemed occupation – All cases

In all cases where a property has been occupied as a main residence at any time then the last 18 months of ownership are exempt.

In respect of tax years up to 5 April 2014 this was 3 years.

The old 3-year limit still applies where an individual is disabled or a long term resident of a care home and does not have an interest in any other private residence. This may also apply to the spouse or civil partner of such a person.

Where the property is let then lettings relief may also apply (see below).

Private residence relief deemed occupation – ‘Sandwich reliefs’

These reliefs require the property to have been occupied prior to the period of absence and afterwards – hence why these are referred to as ‘sandwich reliefs’.

There are a number of reliefs as follows;

  • Any period of up to 3 years;
  • Any period in which the owner of the property lived in ‘job-related accommodation’;
  • Any period for which the owner had to work overseas in a full-time capacity;
  • A period of up to 4 years in which the property owner has to relocate for work in the UK

The requirement to re-occupy the property as a main residence may be relaxed in certain circumstances

The references to work above include both employment and self-employment.

Concession where there is a delay in occupying the property

There is a concession (‘ESC D49”) where there is a delay in occupying a residence where:

  • Land has been purchased on which a house will be built and it will be used as his or her only or main residence;
  • The house has been purchased and alterations / redecorations are to be carried out;
  • The disposal of the previous home is completed prior to using the new house as his only or main residence.

When ESC D49 applies then the period prior to moving in will be deemed as occupation for private residence relief purposes as long as it for less than 12 months.This period may be extended to 24 months If there is a good reasons for a longer delay (and that reason is beyond the control of the individual)

Private residence relief deemed occupation – Rental and lettings

This will apply in all cases where the property has at any time been occupied as the main residence and the property has been let (ie it is not a sandwich relief).

However, the amount of relief provide is the lower of:

  • The gain that is attributable to the let period;
  • The total amount of the gain subject to private residence relief; and
  • £40,000.

It should be noted that proposed reforms to ‘Lettings Relief’ are currently under consultation. It is likely that this relief providing for deemed occupation will be much more narrowly focused in the future (likely with effect from April 2020).


If you have any queries about private residence relief deemed occupation or about private residence relief at all then please get in touch.


Private residence relief deemed occupation was last updated on 8 April 2019


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