If you used part of your home for business purposes, the tax implications depend on the exclusivity and extent of the business use:

  1. Exclusive Business Use:
    • If a specific part of your home, such as a room, was used exclusively for business purposes, then the gain attributable to that part may be subject to Capital Gains Tax (CGT). This means you might lose Private Residence Relief (PRR) for the portion of the home used solely for business.
  2. Dual Use:
    • If the part of your home used for business purposes also served as a personal space (e.g., an office that is also used as a guest room or a study where children do homework), this dual use generally does not affect your entitlement to PRR. In this case, you should still be eligible for full relief.
  3. Example Scenarios:
    • Exclusive Use: If you used a room solely as an office and never for personal purposes, the gain from selling that part of the home would be taxable.
    • Dual Use: If you used the office both for work and as a family room, this mixed use should protect your PRR, and you would not have to pay CGT on the gain from this part of the home.

Key Considerations

  • Evidence of Use: Be prepared to provide evidence of how the space was used, especially if you claim dual use to secure PRR.
  • Professional Advice: If you’re uncertain about how your business use of the home might affect your tax situation, consulting a tax advisor can provide clarity and help you make informed decisions.

Understanding these distinctions can help you effectively manage your tax obligations when selling your home.