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HMRC internal manual

Capital Gains Manual

Private residence relief: settled property: notice by trustees


Instructions on the time limit for a notice under TCGA92/S 222(5) are at CG64495, and on the form of that notice at CG64520.

If a person has more than one residence and one or more of those residences is settled property, so that relief could be due under TCGA92/S225, TCGA92/S225(b) requires that any notice which is given to the Inspector should be signed jointly by a trustee of that settlement and by the person entitled to occupy the dwelling house.

For example, a person owns a house and also occupies a house which is owned by a trust of which he is a beneficiary. Both houses are residences of his. Any notice under TCGA92/S222(5) nominating which of these residences is his main residence is to be given jointly by him and by a trustee.

The reason for requiring the signature of both parties is that the interests of the individual and of the trustee may differ. In the example above, if the gain which is likely to arise on the house owned personally by the individual is greater than any likely gain on the trust property, the individual would wish to nominate his own house to attract relief. But the trustees would wish to protect all the beneficiaries and would not want the trust assets to be diminished by a tax charge. So they may wish to nominate the trust property. Because of the conflict of interest it is important to have the explicit agreement of both parties.

In some circumstances the parties may be unable to agree and you will need to decide which residence was in fact the individual’s main residence, using the criteria at CG64545.