Glossary · UK
What is Lettings Relief?
A Capital Gains Tax relief, now tightly restricted, for landlords who let out a property that was also their main home.
Full Definition
Lettings Relief is a Capital Gains Tax (CGT) relief that can reduce the taxable gain when you sell a property that was both your main residence and, at some point, let out. Since April 2020 the rules are far more restrictive: relief is only available where the owner was in shared occupation with the tenant for the let period. Where it applies, the relief is the lowest of the gain attributable to letting, the amount of Private Residence Relief, or GBP 40,000. It is claimed on top of Private Residence Relief and the CGT Annual Exempt Amount, which is GBP 3,000 for 2026/27. Residential property gains are taxed at 18 per cent within the basic-rate band or 24 per cent above it. Because the relief was sharply curtailed, many landlords who once expected to qualify no longer do, so check current eligibility carefully before relying on it. See gov.uk for the precise occupation conditions.