Making a main residence nomination

Main residence exemption

Private residence relief (PRR) is available to exempt capital gains tax (CGT) that would otherwise be payable on the disposal of a residential property. PRR covers the period for which that property was the owner’s “only or main” residence, and also the final nine months of ownership (or final 36 months where the person is disabled or moves into long-term care). Certain qualifying periods of absence are also treated as periods of occupation for the purposes of the exemption (see CG65030 for details).

Only one “main” residence

A person can only have one main residence at any time for CGT purposes. Spouses and civil partners can only have one main residence between them. Where there is more than one property that is actually used as a residence, the general rule is that HMRC will consider the main one to be the property where they spend the most time, though this can be overridden by making a nomination.

Nominations

A nomination can only be made within two years from the date that the combination of residences changes. This may be because a residence is acquired or one is sold. It can also be because a property starts to be let (or ceases to be let), as this affects the combination of residences available to live in. The nomination has effect from the date on which the combination of residences changed until the earlier of:

• the date on which the combination of residences changes again; or
• the date from which a notice of variation to the original notice applies.

The nomination must be made in writing, signed by all owners and state the address of the nominated residence.

Example. John has a cottage in Bath. He purchases a flat in Cardiff, which he occupies three days a week from 20 May 2025. He has until 20 May 2027 to nominate one of the properties as his main residence for CGT purposes.

Qualifying nomination

A property can only be the main residence if it is lived in as a home. An investment property which is let out cannot be a main residence during the let period. However, living in it as a main residence before and/or after it is let can access PRR for part of the period of ownership. When deciding which home should be designated as the main residence, the aim is to maximise PRR. This will normally be the property expected to accrue the greatest gain over the period of the nomination. However, if a sale of the current main residence is on the cards and the final nine months of ownership is already sheltered, or any gain would be covered by the annual exempt amount, making a notice of variation to change the nomination may be worthwhile.

Variation

After making a nomination, the main residence can be changed, or “flipped” by making a notice of variation at any time. The main residence will change from the date specified in the notice, which may be up to two years before the date on which the notice is given.