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HMRC internal manual

Capital Gains Manual

Private residence relief: the entity of the dwelling house: curtilage

Curtilage is a legal concept which applies to land as well as to the buildings on the land. For the purposes of private residence relief it is used solely to identify the dwelling house which attracts relief. It has no relevance to the identification of the permitted area of garden and grounds.

The word curtilage is defined by the Shorter Oxford Dictionary as, “a small court, yard, or piece of ground, attached to a dwelling house and forming one enclosure with it”. This definition of the word was quoted in Methuen-Campbell v Walters (see below). When setting down the ‘curtilage test’ emphasis was placed on the smallness of the area. So buildings standing around a courtyard together with the main house will be within the curtilage of the main house. Where such buildings have a residential use, they will be included within the entity making up the dwelling house. It is important to remember that in order to be part of the entity of the dwelling house, the building must have a residential purpose regardless to its closeness to the dwelling house.

In the Leasehold Reform Act case of Methuen-Campbell v Walters, which is quoted with approval by the Court of Appeal in Lewis v Rook, it was noted that there may be occasions where more dispersed buildings will fall within a single curtilage if their relationship with each other is such that they constitute an integral whole. The Court held that,

“For one corporeal hereditament to fall within the curtilage of another, the former must be so intimately associated with the latter as to lead to the conclusion that the former in truth forms part and parcel of the latter.”

Whether one building forms part and parcel of another is a question of fact and will depend primarily on the close geographical relationship between them. Buildings which are within the curtilage of a main house are also likely to pass on conveyance of that house without having to be specifically mentioned.

Furthermore, because the test is to identify an integral whole, a wall or fence between two buildings will normally be sufficient to establish that they are not within the same curtilage. Similarly a public road or stretch of tidal water will set a limit to the curtilage of a building. However there are occasions where the existence of a wall between buildings will not establish that they are not within the same curtilage. For example often large country houses or estates will have walled gardens or decorative walls which will not separate buildings in this way. The particular facts and circumstances must be considered in each case in drawing a conclusion.

It is sometimes argued that because the whole of an estate is contained within a single boundary, the whole estate will have a single curtilage so that all the buildings on the estate will be within the curtilage of the main house. This argument should be resisted. Our view is that this argument confuses the curtilage of the main house with the curtilage of the estate. This view is supported by Balcombe LJ’s comment in Lewis v Rook,

“First, attention must be focused on the dwelling-house which is said to constitute the entity. To seek to identify the taxpayer’s residence may lead to confusion because where, as here, the dwelling-house forms part of a small estate, it is all too easy to consider the estate as his residence and from that conclude that all the buildings on the estate are part of his residence.”

Whether or not a particular building is within the curtilage of the main house is a matter of fact and degree. The building must be geographically close to the main house and be an integral part of it. The necessary proximity required will vary in each case so it is not possible to set a generally acceptable limit. In Lewis v Rook the main house was an 8 bedroom mansion set in 10.5 acres of land but the Court concluded that a cottage 175 metres from the main house was not within its curtilage. Smaller houses will have a much less extensive curtilage, so the particular facts must be considered in each case.