What Counts as Your Main Residence? CGT Relief Rules Explained for Expats

Introduction

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If you're a UK expat thinking about selling a residential property in the UK, it’s crucial to understand how Private Residence Relief (PRR) could help reduce — or even eliminate — your Capital Gains Tax (CGT) bill.


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One of the most powerful tax reliefs available when selling your UK home is Private Residence Relief. But for expats, especially those who’ve spent time abroad, the rules can get complex — particularly around what HMRC considers your “main residence” and how “deemed occupation” works.

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🧾 What Is Private Residence Relief?

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Private Residence Relief (PRR) is a relief from Capital Gains Tax available when you sell a property that has been your only or main residence during your period of ownership.


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If the property has always been your main home, and you’ve lived in it the whole time you’ve owned it, you won't pay any CGT on the gain when you sell.


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However, if you’ve lived elsewhere — including abroad — then only part of the gain may be tax-free, and the rest could be subject to CGT.

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🏘️ What Qualifies as a Main Residence?

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Your “main residence” is usually the home where you spend the most time. But HMRC doesn’t just count where you sleep — they look at a number of factors, including:


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1. Where your family lives
2. Where you’re registered to vote
3. Utility bills and other evidence of day-to-day life


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If you own more than one property, you can elect which one should be treated as your main residence for CGT purposes — but you must do this within two years of acquiring the second home.

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🏖️ Deemed Occupation: Relief Even When You’re Not Living There

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Even if you weren’t living in the property for the entire period of ownership, certain periods of absence can still qualify as exempt under PRR. These are known as “deemed occupation” periods.


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Final 9 Months of Ownership


Providing that the property has been your main residence and physically occupied at some point during ownership, the final 9 months before sale are always treated as occupied for PRR purposes. This gives sellers a grace period, useful for those moving or transitioning out of the property.


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Any 3-Year Period for Any Reason

You can claim relief for any absence up to 36 months, regardless of the reason — whether for work, travel, or lifestyle, providing that you re-occupy, following the period of absence, prior to sale.


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Up to 4 Years Working Elsewhere

If your job requires you to relocate (either in England or overseas), you can claim relief for four years of absence. Generally, you must re-occupy the property following the period of absence unless you are unable to due to work commitments.


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Unlimited Time Working Abroad

If you are mandated to work overseas by your employer, for example on assignment or posting, and you do not work in the UK during this period, an unlimited amount of time can be treated as deemed occupation. Generally, you must re-occupy the property following the period of absence unless you are unable to due to work commitments.

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📌 Key Takeaways for Expats

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🔸 PRR can substantially reduce CGT, but you must meet both occupation and deemed occupation criteria.
🔸 Always consider the final 9 months, and check if you qualify for the 3-year, 4-year, or unlimited work abroad absences.
🔸 Reoccupying the property before selling is often the key to unlocking full relief if you've lived overseas.
🔸 If you’re unsure, seek advice early — especially before you sell.