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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Private residence relief: separation, divorce or dissolution of civil partnership: Mesher Orders

An order by the Courts that a spouse holding an interest in the matrimonial home should hold it on trust for a limited period, for example, until

  • remarriage of the other spouse


  • death of the other spouse


  • the 18th birthday of the youngest child of the marriageand entitling the other spouse to occupy the home for the trust period, is often referred to as a Mesher Order.

Similar orders may be made in connection with the dissolution of a civil partnership.

Alternatively a binding agreement may be made between the parties about the occupation of the home in similar terms but without an order of the Court.

In such cases you should accept that the order or the agreement results in a transfer into trust by the spouse who holds the interest which is subject to the court order or the agreement at the date of that order or agreement. Under TCGA92/S70, see CG35710, such a transfer is a disposal of the whole asset becoming settled property, even though the spouse transferring the property has retained an interest in it.

You should accept that an amount of private residence relief is due under TCGA92/S225 to the trustee of the settlement created by the order or the agreement, see CG65400+, for the trust period, if the property is occupied for some or all of that period as the only or main residence of the spouse entitled to occupy under the terms of the order or agreement. The trustee will usually be the spouse who holds the interest subject to the settlement.

When the stipulated period ends, the spouse holding the interest in the property which is subject to the trust will generally become absolutely entitled to it, see CG37000+. There will be a deemed disposal by him or her as trustee under TCGA92/S71 (1).

An example illustrating the effect of such an order is at CG65376+.