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S223B TCGA92

For disposals on or after 6 April 2020, where relief is restricted because part of the dwelling-house has been let as residential accommodation, a further relief (known as lettings relief) may be available under s223B TCGA92. This further relief is not available for any period during which the whole dwelling-house was let out. 

It is therefore important to identify the entity which makes up the dwelling-house for the purpose of s222(1)(a) TCGA92 in order to decide if lettings relief is due under s223B TCGA92, see CG64230+.

It is also important to properly identify the entity making up the dwelling-house where the property is used for a trade which involves letting as this may not be a straightforward question. This is covered in more detail at CG64723+.

Lettings relief is due under s223B TCGA92 where 

• a gain to which s222 TCGA92 applies accrues to an individual, and
• part of the dwelling-house has at some time in the individual’s period of ownership been their only or main residence, and
• during that time another part of the dwelling-house has been let out by the individual as residential accommodation, and
• a chargeable gain arises by reason of that letting, see CG64721.

»Ê¹ÚÌåÓýapp amount of the relief is the lowest of:

• the amount of private residence relief given by s223(1) to (3) TCGA92,

or

• £40,000,

or

• the amount of the chargeable gain arising by reason of that letting.

S223(4) TCGA92

Where the disposal was before 6 April 2020 and relief is restricted because some or all of the dwelling-house has been let as residential accommodation, an earlier form of lettings relief may be available under s223(4) TCGA92. »Ê¹ÚÌåÓýapp main difference in practice between this earlier form of the relief and relief under s223B TCGA92 is that this relief can apply to a period during which the whole dwelling-house was let out. 

As with lettings relief under s223B TCGA92, and for the same reasons, it is important to identify the entity which makes up the dwelling-house.

Relief is due under s223(4) TCGA92 where 

• a gain to which s222 TCGA92 applies accrues to an individual, and
• part or all of the dwelling-house has at some time in the individual’s period of ownership been let as residential accommodation, and
• a chargeable gain arises by reason of the letting, see CG64721.

»Ê¹ÚÌåÓýapp amount of the relief is the lowest of,

• the amount of private residence relief given by s223 (1) to (3) TCGA92,

or

• £40,000,

or

• the amount of the chargeable gain arising by reason of the letting.