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HMRC internal manual

Capital Gains Manual

Private residence relief: settled property: introduction


TCGA92/S225 extends private residence relief to gains accruing to trustees on the disposal of settled property. During the period of ownership of the trustees the property must be a dwelling house occupied as the only or main residence of a person entitled to occupy it under the terms of the settlement.

If these conditions are fulfilled private residence relief is due in the same way as it would be due on a gain accruing to an individual. This includes relief given on the disposal of the garden or grounds and any further relief available under TCGA92/S223(4) if the dwelling house has been let. See CG64710+.

The guidance deals with conditions for section 225 to apply as follows:

  • Is the property settled property? CG65405
  • Is the property held on express trust? CG65406
  • Is the occupier entitled to occupy under the terms of an express trust? CG65407+
  • Is the property held on implied trust? CG65415+.

If the disposal is made on or after 10 December 2003 the trustees must claim the relief. Also, TCGA92/S226A may deny or restrict the relief if there has been an earlier claim to holdover relief under TCGA92/S260. See CG65440+ for guidance on disposals made on or after 10 December 2003.

If the beneficiary has more than one residence any notice under TCGA92/S222 (5)(a) must be made jointly with the trustees. See CG65450.