Take advantage of permitted absences for main residence relief

Main residence relief is a valuable relief which prevents a tax charge arising where a gain is realised on the disposal of a property which is your only or main residence. Where a property has been an only or main residence for some but not all of the period of ownership, the gain is sheltered to the extent that it is occupied as an only or main residence or a period of absence was a permitted period of absence. The final nine months are also protected.

Permitted absences

Main residence relief remains available for some periods of absence. However in all cases the property  must have been your main residence and you must return to the property as your main residence again.

A period of absence would also be treated as deemed occupation if you are living with your spouse/civil partner who meets either “Qualifying absence 1 or 2”.

Qualifying absence 1 –  period of three years for any reason

You can be absent from your main residence for up to three years in total without losing main residence relief,

This is a very valuable relief and can be put to good use to shelter some or all of the gain that would otherwise arise when a property has been let, particularly when combined with the exemption for the final nine months of ownership. The three-year period of absence does not have to be continuous – shorter periods of absence also count, as long as they do not exceed three years in total. 

Qualifying absence 2 – working abroad

A period of absence where the duties of your employment are all performed abroad qualifies as “deemed occupation”. There is no time limit to this. 

If you are unable to resume living in the property as your only or main residence as the terms of your employment required you to live elsewhere in order to perform the duties of your employment effectively this should also qualify.

Qualifying absence 3 – 4 years living elsewhere due to work

A period or periods of absence not exceeding four years in total during which you were prevented from living in the property as a result of the place of your work or of a condition reasonably imposed by your employer requiring you to work elsewhere to ensure the effective performance of the duties of your employment is a qualifying period of absence.

If you are unable to resume living in the property as your only or main residence as the terms of your employment required you to live elsewhere in order to perform the duties of your employment effectively this should also qualify.

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