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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Death: non-trust life interests: Northern Ireland

TCGA92/S63A and IHT84/S43(5)

The land law of Northern Ireland, except where there is specific legislation to thecontrary, is basically the same as the pre-1925 law of England & Wales. Accordingly itis possible to have a legal interest ‘limited for life’. Under IHTA84/S43 (5) in such asituation the property is deemed to be settled property. There was no comparable provisionfor CGT until TCGA92/S63A was enacted in FA 2006 with effect from 6 April 2006. Under thisprovision where a person with a legal interest limited for life dies, a person whoacquires in fee simple or fee tail in possession as a consequence of the former person’sdeath is deemed to acquire all the assets forming part of the property at market value atdeath. This does not apply to land in Ireland outside Northern Ireland.

A disposal of such an interest during one’s lifetime would, if the expectation of life isless than 50 years, be a disposal of a wasting asset. See S44 TCGA. In appropriate casesthe disposal of such an interest would qualify for private residence relief under s222TCGA.