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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Private residence relief: exchanges of interests: introduction

Individuals who are joint owners of land may exchange interests so that each of them is sole owner of part of that land. Individuals who are sole owners of land may exchange their interests.

The method of computing chargeable gains on an exchange is explained at CG13090+. Relief from Capital Gains Tax on the exchange of joint interests may be obtained under ESC/D26 in certain circumstances in relation to disposals prior to 6th April 2010. The operation of this concession is explained generally at CG73015+, and for private residence relief at CG65170.

In relation to disposals on or after 6th April 2010 the relief is given by TCGA 1992/S248A - 248E, see CG73002+, and for private residence relief CG65155.

This section explains what private residence relief you should allow on the exchange of an interest in a dwelling house which has been an individual’s only or main residence.

Where an individual disposes of an interest in a dwelling house which has at some time been their only or main residence, in exchange for an interest in another asset, private residence relief is due in the usual way on the dwelling house sold. The value of the asset received is the measure of the consideration received for the disposal of the dwelling house.

Relief should also be allowed where two or more individuals jointly own the dwelling houses in which each of them resides and they exchange interests so that each is the sole owner of the dwelling house in which they themselves reside, see CG65170+.