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The article I quoted, quoted this post. Having family staying in the GF won't affect CGT status- but renting it out afterwards becomes a more murky area. The article suggests that even with family, it should be treated as a separate room to the main house to keep CGT exemption, with the...

Check out this thread regarding possible loss of CGT exemption when building a granny flat: http://somersoft.com/forums/showthread.php?t=94012