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 whichever is 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 doable!
We can do this together! Contact our team today for comprehensive support on calculating your eligibility for lettings relief.
Capital Gains Tax is a charge you need to pay to HMRC based on profits you make from selling an asset, such as a property. For more information about Capital Gains Tax, read our helpful article here!