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HMRC internal manual

Capital Gains Manual

Private residence relief: garden and grounds: Varty v Lynes: not resident at date of disposal

Some uncertainty was caused by an observation by Brightman J in the case of Varty v Lynes (51TC419),

“On the construction advanced by the Crown it must follow, I am disposed to think, that if the taxpayer goes out of occupation of the dwelling house a month before he sells it, the exemption will be lost in respect of the garden.”

This statement may be interpreted incorrectly as meaning that if the owner of a dwelling house is not physically present in it at the date of sale, there can be no relief on a disposal of the garden and grounds. However it is important to place this statement in context. It formed no part of the Judge’s reasoning in deciding the case and that particular point was not argued before him. Indeed he went on to say,

“that, however, is merely my impression, and I do not intend so to decide because it is not a matter for decision before me.”

It is our view that relief would not be lost in these circumstances.