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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Private residence relief: garden and grounds: introduction

TCGA92/S222 (1) (b)

The guidance at CG64230+ explains how to identify the entity of the dwelling house for the purposes of TCGA92/S222 (1) (a).

In addition to the relief available on the disposal of a dwelling house, relief may also be due under TCGA92/S222 (1) (b) on the disposal of land held with that dwelling house.

To qualify for relief the land must meet the following conditions on the date on which it was disposed of,

  • It must be occupied and enjoyed as the garden or grounds of the residence, see CG64360
  • The area of land must not exceed the permitted area, see CG64800+

Although these tests must be satisfied at the date of disposal of the land, this does not mean that all land which passes the tests will necessarily qualify for full relief. This is because the tests set out in TCGA92/222 (1) (b) simply determine which land can, in principle, qualify for relief. The actual amount of relief available is determined by the rules set out in TCGA92/223.

The amount of relief available under TCGA92/223 is dependent on how the dwelling house was used over the period of ownership. However section 223 makes no reference to how the land was used over the period of ownership. Therefore the use of the land at any date other than the date of disposal is irrelevant. Some examples which illustrate this are given at CG65110 and CG65111.

You should also bear in mind that the concept of curtilage, which is explained at CG64245, has no place in determining the area of garden and grounds. For the purposes of private residence relief the concept of curtilage relates solely to the identification of the entity of the dwelling house. The garden and grounds of a dwelling house, or the permitted area of the garden and grounds, may well extend beyond the curtilage of the dwelling house.