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HMRC internal manual

Capital Gains Manual

Private residence relief: garden and grounds: ownership

TCGA92/S222 (1) (b) requires that in order to qualify for relief land must be held with the residence. This will usually, but not always mean that the land is in the same ownership as the dwelling house. However, as explained at CG64470, a dwelling house can be a person’s residence without them owning it. This means that if a person lives in a dwelling house which they do not own, but they own land which is the garden and grounds of that dwelling house, relief will be available on a disposal of that land provided the other conditions for relief are fulfilled. Land can still be part of the garden and grounds of a person’s residence even if that person does not own the dwelling house.

It may be rare for a person to own the land but not the dwelling house but the following examples may occur,

  • Dwelling house owned by the trustees, and residence of a beneficiary, land owned by beneficiary.
  • Dwelling house owned by company, and residence of director, land owned by director.
  • Dwelling house owned by husband, and residence of husband and wife, land owned by wife.
  • Dwelling house owned by civil partner and residence of both civil partners, land owned by other civil partner.

In each of these cases relief may be due on a disposal of the land if the other conditions for relief are fulfilled.