Your Home & Tax

The general rule is that your Principal Private Residence is exempt from Capital Gains Tax.

Moving Home – The law allows you a certain period when you have bought a second home to live in but are still living in your old home (for instance when your new home needs to be renovated). This is covered by the rule that the last three years of ownership of a principal private residence are always counted as owner occupied and therefore exempt Capital Gains Tax.

Own More Than One Home – The rules also allow you to elect which property is your Principal Private Residence if you own more than one. You cannot nominate a property you have never lived. You must notify HMRC within two years of acquiring a second home (or 2 years from when it was in a fit state to be habitable) which is to be your Principal Private Residence. You may later notify a change of choice. If no notification is made and a dispute arises, the main residence will be decided as a question of fact.

Careful consideration needs to be given when a second home is acquired.

I attach a link here to a helpsheet from HMRC:


Home Part used For Business

When an individual works from home part of your home expenses can be claimed as a business expense.

Business rates are due if part of your property is used exclusively for business. If that part is used both for business and for domestic purposes and the business use does not prevent the continued domestic use business rates won’t be payable.

Again PPP capital gains tax exemption is not available on any part of the property that is used exclusively for business purposes. The CGT exemption is still available if no part of your home is used exclusively for business.

Rent A Room Relief

Rent a room relief is available for owner occupiers and tenants who let furnished rooms in their only or main residence. The owner must occupy the building for at least part of the tax year.

No tax will be payable if the gross rent does not exceed £4,250 per annum

If you need further help and advice please contact me on [email protected] or visit my website pmarks.co.uk


Paul Marks & Co Chartered Accountants is the trading name of Paul Marks Ltd a Limited Company registered in England and Wales (registered number 4487645). This article is designed for the information of readers only and readers should not act on any of the information contained in this article without seeking professional advice. Nothing in this article constitutes advice, nor does the transmission, downloading or sending of any information or the Material create any contractual relationship. Links to third party websites are provided as a convenience to the reader, Paul Marks Ltd does not control and is not responsible for any of those websites or their content. Paul Marks Ltd accepts no liability or responsibility whatsoever for any loss or damage suffered by any user of the information contained on or accessed through this article or the Material downloaded.