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Property:
Selling your home

When you sell your home, any gain is usually exempt from capital gains tax. You are entitled to a tax exemption for your �principal private residence�. If you have only one home, it is obvious which is your principal private residence. If you have more than one home, including a holiday home, the position is more complicated. For more information, click here.

The tax exemption covers both the house and its grounds. There is a limit on the size of grounds which qualify for exemption. The limit is normally 0.5 hectares (5,980 square yards), but may be increased if the size and character of the house is such that a larger area is required for the reasonable enjoyment of the house. This can be a rich subject of debate with HM Revenue & Customs. If you have a large plot, beware selling off the �surplus� for development. By doing so, you may just be proving that the �surplus� was not required for the reasonable enjoyment of the house! In such a case, you need tax planning advice before you do anything.

You get complete exemption only if the whole property has been your principal private residence throughout your whole period of ownership.

If part of the property has been used exclusively for business purposes, a proportion of any gain may be taxable. For more information click here. If the property, or part of it, has been let out, a proportion of any gain may be taxable. For more information click here.

If the property has not been your principal private residence throughout your whole period of ownership, you may get only partial exemption. Fortunately, there are a few valuable concessions:

Where there is a delay in taking up residence, for example because of alterations or renovation, then a delay of up to 12 months is ignored. That can sometimes be extended up to 2 years.

Absences up to 3 years in total are ignored.

Absences up to 4 years may be permitted in some cases where your employment (or self-employment) requires you to live elsewhere. This may be increased without limit if the duties of your employment are performed wholly outside the UK. If you have another home during the period of absence, the rules are tricky and you will certainly need specialist advice.

The final 3 years of ownership normally qualify for exemption. So if you move out and later sell your home within 3 years you will normally get complete exemption.