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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
Updated
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Private residence relief: personal representatives

TCGA92/S225A

Prior to FA 2004, relief under the legislation at TCGA92/S222-TCGA92/S226 was available only to

  • individuals

and

  • the trustees of settled property.

However, ESCD5 extended relief to the personal representatives of deceased persons if certain conditions were satisfied.

FA 2004 introduced new provisions in TCGA92/S225A which give statutory effect to ESCD5. The new provisions apply to disposals on or after 10 December 2003 so that where personal representatives dispose of a property falling within TCGA92/S222(1), private residence relief is available under TCGA92/Ss222-224 provided that

  • immediately before and immediately after the death of the deceased, one or more individuals have occupied the property as their only or main residence
  • the individual is (or the individuals are between them) entitled to at least 75% of the net proceeds of disposal (that is, the proceeds of the disposal realised by the personal representatives less any incidental costs of disposal) or to an interest in possession in 75% or more of these proceeds
  • the personal representatives make a claim for private residence relief.

If relief is due under these provisions it should be computed in the same way as it would have been if the personal representatives were trustees, the dwelling house were settled property and the persons occupying the dwelling house were entitled to occupy it under the terms of the settlement.

For disposals before 10 December 2003, under ESCD5 relief is allowable to any personal representatives on the disposal, during the administration period, of a house which both before and after a deceased person’s death was the only or main residence of individuals who, under the will or intestacy, are entitled to the whole or to substantially the whole of the proceeds of sale of the house, either absolutely or for life.

`Substantially the whole’ means at least 75% If the interest amounts to less than 75%, relief should be refused.

If relief is due under the concession it should be computed in the same way as it would have been if the personal representatives were trustees, the dwelling house were settled property and the persons occupying the dwelling house were entitled to occupy it under the terms of the settlement.

The guidance in CG65450 on notices by trustees of settled property apply also to personal representatives if the individual has more than one residence.