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HMRC internal manual

Capital Gains Manual

Private residence relief: exchange of jointly owned dwelling house: disposals prior to 6 April 2010: ESC/D26


ESC/D26 provides relief on exchanges of land by joint owners in two circumstances

  • where the land received does not include a dwelling house which is or becomes used as an only or main residence and so would be eligible for relief under TCGA92/S222-TCGA92/S226, see CG73015+
  • where joint owners exchange interests in their respective residences.

Where two or more individuals jointly owning their respective residences become sole owners by exchanging the appropriate interest, full relief is available in respect of the gain accruing up to the date of exchange, provided that

  • each of the individuals satisfies the conditions for full private residence relief under TCGA92/S223 so that the gain would be exempt, in respect of the interest in the property which they occupy,


  • each undertakes to accept that for Capital Gains Tax purposes they will acquire the other’s interest in the property transferred to them at the original base cost and the original date upon which that joint interest was acquired.

For the purpose of the concession a married couple are treated as if they were a single individual. So an exchange of interests which results in a married couple being the joint owners of a residence may attract relief. Civil partners are treated in the same way.

Where a dispute concerning this relief cannot be resolved, a submission should be made to Capital Gains Technical Group.

The effect of the concession is illustrated by the example at CG65175.