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HMRC internal manual

Capital Gains Manual

Private residence relief: settled property: common intention constructive trusts: common intention must normally exist at the time the property was acquired


Normally the common intention must date from the time the property was acquired. So you are looking for evidence of “agreements, arrangements or understandings” that someone would have an interest in the property when the legal owner or owners acquired the property. It would be exceptional for the common intention to be established at a later date.

Lord Neuberger comments on this in paragraph 138 of his dissenting opinion in Stack v Dowden. He begins by acknowledging “the fact that the ownership of the beneficial interest in a home is determined at the date of acquisition does not mean that it cannot alter thereafter” and goes on to say:

It seems to me that “compelling evidence”, to use Lord Hope’s expression in paragraph 11, is required before one can infer that, subsequent to the acquisition of the home, the parties intended a change in the shares in which the beneficial ownership is held. Such evidence would normally involve discussions, statements or actions, subsequent to the acquisition, from which an agreement or common understanding as to such a change can properly be inferred.