Will you pay capital gains tax if you sell your home to relocate for work?

What is Private Residence Relief?

Private Residence Relief (also known as Main Residence Relief) means you don’t have to pay CGT when selling your home, as long as:

• The property has been your only or main home for the entire time you’ve owned it.
• You haven’t let out part of it (except to a lodger).
• You haven’t used part of it exclusively for business purposes.
• The total plot is under 5,000 square metres (including the house).
• The property wasn’t bought purely to make a profit.

If these conditions are met, you automatically qualify for CGT relief and won’t need to report the sale.

What happens if I move out before selling?

If you've already moved to a new area for work and your old home is taking time to sell, you may still avoid CGT.

The final period exemption allows you to treat the last nine months of ownership as if you still lived there. That means even if the property is empty or listed for sale, this period remains exempt from CGT.

This rule applies regardless of whether you’re buying a new home, renting temporarily, or moving abroad.

Can work-related absences still qualify as main residence?

Yes. In some cases, you can be treated as living in your home even when you’re not physically there — a rule known as “deemed occupation.”

This applies to certain absences if you:

• Lived in the home before the absence.
• Returned to live there afterwards, or intended to but were prevented from doing so.

The following periods still count as if you lived in the property:

• Up to three years for any reason.
• Any length of time working abroad, if required by your employer.
• Up to four years if you had to live elsewhere in the UK for work.

As long as these conditions are met, those periods will not reduce your Private Residence Relief, and you may still avoid CGT.

What if I rented out the property after moving?

If you let the property after moving for work, you may owe CGT on the portion of the gain that occurred during the rental period. However, you can still claim Private Residence Relief for the time you lived there, plus the final nine months of ownership.

Lettings Relief may reduce your CGT bill, but as of recent rule changes, it only applies if you shared the property with your tenants during the rental period.

What if I kept the home empty after moving?

Keeping the property empty may allow you to benefit from the final nine-month exemption, but anything beyond that may be taxable if you don’t return to live there.

You’ll owe CGT on the proportion of the gain that occurred during periods the home was neither your main residence nor covered by deemed occupation rules.

What if I decide to rent out the property instead?

If you're relocating for work but aren't ready to sell your home, you might consider renting it out. This can provide regular income and allow you to keep the property as an investment, particularly if you plan to return in the future or expect property values to rise.

Benefits of renting out your home

• Steady rental income.
• Future flexibility.
• Property value growth.

Complications to consider

• Landlord responsibilities.
• Void periods.
• Lettings management.
• Mortgage restrictions.
• Capital Gains Tax later.

While renting can delay the need to make a sale, it's not a perfect solution for everyone, especially if you're relocating long-term or don’t want the hassle of being a remote landlord.

Will renting out my home while relocating affect my capital gains relief?

Yes, renting out your home after you move can reduce the amount of Capital Gains Tax (CGT) relief you receive when you sell. While you may still qualify for some Private Residence Relief, the time the property is let is usually not exempt unless specific rules apply.

How Private Residence Relief works

Private Residence Relief exempts the gain made while the property was your main residence. This applies automatically and usually covers:

• The period you lived in the home as your main residence.
• The final nine months of ownership, even if you’ve already moved out.
  

What changes if you rent it out?

If you rent out the property after relocating, the period it is let is not covered by Private Residence Relief. This means the profit made during the letting period is likely to be taxable when you eventually sell.

What about Letting Relief?

Letting Relief used to reduce CGT for landlords who had lived in the home before letting it out. However, this now only applies if:

• You lived in the property at the same time as your tenant (i.e. you had a lodger).

If you didn’t share the property, Letting Relief no longer applies, and the letting period is fully taxable unless covered by another exemption.

Deemed occupation rules still help

If you moved away for work and intend to return, some absences may still count as periods of residence. You could still qualify for full or partial relief if:

• You lived in the home before and after your move.
• The move was job-related and falls within the recognised absence periods.

Proportionate CGT may apply

If part of the gain on the property relates to a period when it was let and not covered by an exemption, that portion is subject to CGT. The longer you let it out, the greater the share of gain that may be taxed.

Keep detailed records

You’ll need to know:

• The dates you lived in the property.
• The dates it was let.
• Whether any work-related absences apply.
• The value of the property at sale and any deductible costs.

This helps you or your adviser calculate the CGT due accurately and avoid overpaying tax.