More and more people work from home these days. Does working from home affect the CGT exemption on sale? The answer is simple - it may do!
Rather more helpfully the basic rule is that the exemption will be denied to the extent that part of your home is used exclusively for business purposes. In many cases of course the business use is not exclusive, your office doubling as a spare bedroom for guests for example, in which case there is not a problem.
Where there is exclusive business use then part of the gain on sale will be chargeable rather than exempt. However this part of the gain may well be eligible for business asset taper relief quite probably at 75% which will serve to reduce the impact of any charge. As is all too often the case with tax, the calculation is neither as simple nor as logical as you would expect but we can talk you through the principles involved if this is of interest to you. In any case it may well be that you plan to acquire a further property, also with part for business use, in which case the business use element of the gain can be deferred by ‘rolling over’ the gain against the cost of the new property.