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HMRC internal manual

Capital Gains Manual

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Death and Personal Representatives: Non-trust life interests: 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 the contrary, is basically the same as the pre-1925 law of England & Wales. Accordingly it is possible to have a legal interest ‘limited for life’. Under IHTA84/S43 (5) in such a situation the property is deemed to be settled property. There was no comparable provision for CGT until TCGA92/S63A was enacted in FA 2006 with effect from 6 April 2006. Under this provision where a person with a legal interest limited for life dies, a person who acquires in fee simple or fee tail in possession as a consequence of the former person’s death is deemed to acquire all the assets forming part of the property at market value at death. This does not apply to land outside Northern Ireland.

A disposal of such an interest during one’s lifetime would, if the expectation of life is less than 50 years, be a disposal of a wasting asset. See S44 TCGA. In appropriate cases the disposal of such an interest would qualify for private residence relief under s222 TCGA.