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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
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Private residence relief: permitted area: land not required for the reasonable enjoyment of the dwelling house as a residence

TCGA92/S222 (3) sets out that a larger permitted area may be allowed where that larger area is required for the reasonable enjoyment of the dwelling house, see CG64818.

However, where the garden and grounds of a dwelling house are in excess of the permitted area and there is a separate disposal of part of those garden and grounds, this may be prima facie evidence that the part disposed of was not required for the reasonable enjoyment of the dwelling house as a residence.

There are circumstances where this inference may be incorrect for example,

  • A disposal of part of the garden and grounds within the family. In these circumstances the owner may be prepared to tolerate some curtailment of the reasonable enjoyment of their own residence.
  • A disposal of part of the garden and grounds due to financial necessity. Financial difficulties may force a person to dispose of a piece of land which would otherwise be regarded as part of the garden and grounds required for the reasonable enjoyment of the residence.

However the fact that there are acceptable reasons why the area of garden or grounds was disposed of does not lead to the conclusion that the land was within the permitted area. It simply means the inference that the area of garden or grounds was prima facie not required cannot be made in that particular case.