Capital Gains Tax Relief for Job-Related Accommodation: What You Need to Know
- Xero Queen
- Aug 4, 2025
- 3 min read
If you're selling a property you bought as your home but never lived in due to job-related accommodation, you might assume you’ll face a Capital Gains Tax (CGT) bill.
However, a lesser-known tax relief could help you avoid it — Private Residence Relief (PRR) may still apply, even if you never moved in.
Let’s explore how this works, when it applies, and how to protect yourself from an unexpected tax charge.
What Is Private Residence Relief (PRR)?
You may well be familiar with PRR, PRR is a tax relief that exempts most people from Capital Gains Tax (CGT) when they sell their main home. Normally, to qualify, you must have lived in the property as your only or main residence. But there’s an important exception: job-related accommodation.
If your job required you to live elsewhere, PRR can still apply to a property you intended to live in—even if you never did.
What Counts as Job-Related Accommodation?
According to HMRC, accommodation is considered job-related if it’s provided by your employer (or your spouse’s employer) and meets one of the following conditions
· It’s necessary for the proper performance of your job.
· It’s customary for your type of work and helps you perform your duties better.
· It’s provided as part of special security arrangements.
Examples include:
· Pub managers living above the premises
· Boarding school staff like housemasters
· Ministers of religion
· Farm workers and caretakers
· Armed forces personnel receiving accommodation allowances
The PRR Election: Protecting Your Main Residence Status
If you live in job-related accommodation under a tenancy agreement rather than as part of your employment contract, it may be treated as your main residence. This could disqualify your owned property from PRR.
Tip:
You can elect to treat your owned property as your main residence—even if you’re not living in it—by notifying HMRC. This election must be made within two years of acquiring the second residence.
Letting the Property You Intended to Live In
Letting out your property while living in job-related accommodation doesn’t automatically disqualify you from PRR. However, be cautious:
If the lease extends beyond the date you expect to leave your job-related accommodation, HMRC may argue you never intended to live there.
Keep documentation that supports your intention to occupy the property, such as:
Mortgage applications stating it was to be your home
Utility accounts in your name
Short-term tenancy agreements
Proving Your Intention to Occupy
HMRC’s guidance focuses more on what disproves your intention than what proves it. This means avoiding red flags—like buying the property after accepting a job with accommodation—can strengthen your case.
Tip:
If you can show that you intended to live in the property but were prevented by job-related accommodation, PRR can apply as if you had lived there.
Key Takeaways
· PRR can apply even if you never lived in the property, provided you intended to and were living in job-related accommodation.
· Job-related accommodation must meet specific criteria set by HMRC.
· You can elect which property is treated as your main residence.
· Keep evidence of your intention to occupy the property.
· Letting the property doesn’t automatically disqualify you—but be careful with lease terms.
FAQ: Capital Gains Tax and Job-Related Accommodation
Q1: Can I claim PRR if I never lived in the property?
Yes, if you intended to live there but were prevented due to job-related accommodation.
Q2: What qualifies as job-related accommodation?
Accommodation provided by your employer that is necessary, customary, or for security reasons.
Q3: How do I elect a property as my main residence?
You must notify HMRC in writing within two years of acquiring the second residence. See HMRC guidance
Q4: What if I let out the property?
Letting doesn’t disqualify PRR, but long-term leases may suggest you didn’t intend to live there.
Q5: What evidence supports my intention to live in the property?
Mortgage documents, utility bills, short-term leases, and correspondence showing plans to move in.
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