CG64385 - Private residence relief: garden and grounds: land disposed between contract and conveyance

There may be some uncertainty about the availability of relief for land which is disposed of in a separate contract in the period between the date on which the contract for the disposal of the dwelling-house is made and the date of conveyance of the dwelling-house.

Where an asset is disposed of under a contract, s28 TCGA92 fixes the date of disposal. Where, as is usually the case, a dwelling-house is disposed of in an unconditional contract s28(1) TCGA92 provides that for Capital Gains Tax purposes the date of disposal is the date of the contract (see CG14250+). However, the conveyance of the dwelling-house will usually take place at a later date.

If some or all of the garden and grounds of the dwelling-house are sold under a separate contract between these two dates then, providing the other tests of s222 TCGA92 are met, relief may be due. However, if the contract for the disposal of the land is dated after the date of conveyance of the dwelling-house, then relief will not be due.

For example, an individual owns a dwelling-house which has been her only or main residence, together with garden and grounds of 0.5 hectares. In July 2020 she contracts to sell the house together with 0.1 hectare of land as a residence. The house and land are conveyed to the new owner in September 2020. In August 2020 she contracts to sell the remaining 0.4 hectares of land to a developer. If the other conditions for relief are fulfilled, relief will be available on the disposal of the 0.4 hectares of land.