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Lettings relief allows you to reduce the amount of Capital Gains Tax (CGT) you pay when you sell a property that was:
Normally, you won’t need to pay CGT when you sell your main residence. You get something called Private Residence Relief (PRR). If you weren’t living there for a while or rented it all or a part of it out, you’ll have to pay CGT on any profits you make when you sell the property and won’t be eligible for the full PRR.
The Capital Gains Tax allowance for the 2024/25 tax year is £3,000. If you make less than this amount in profit, you don’t need to declare it to HMRC.
If you lived in your home at the same time as your tenants, you might qualify for the relief on any taxable capital gains you make when you sell the property 🤩
When you’re eligible for the relief, you can get the lowest of the following:
You can’t use the lettings relief on profits made when the property was empty or fully let out.
Calculating how much lettings relief you could be eligible for requires some maths – but it’s nothing we can’t conquer together
Remember, you can only be eligible for lettings relief for the time that the homeowner and the tenant shared the property.
Properties that were let out completely, do not fall under the criteria and therefore are not eligible for any CGT exemption.
We’ve got even more details in our guide, “When do I owe CGT if I sell my house?” that you can use to make an informed decision.
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