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Posted Sat, 26 Aug 2023 15:59:50 GMT by Mauree n Treadwell
My son is considering taking a second lodger in his house. However, we are not clear on the capital gains tax situation. I understand that if the lodgers live together communally and no-one has 'exclusive use' of any of the property, (i.e. a let under licence) then capital gains tax unlikely to be due. However, if the two lodgers each have exclusive use of a room but share the kitchen and lounge/diner with the owner, then capital gains for a six room house would be 2/6=1/3 of the total capital gains due. What happens to private residence relief? Is that also reduced by 1/3rd? Is this correct? if not, please could you clarify?
Posted Fri, 01 Sep 2023 06:05:53 GMT by HMRC Admin 25 Response
Hi Mauree n Treadwell,
Please refer to guidance here:
Letting Relief
Thank you. 

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