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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Private residence relief: dependent relative: rent free: payments made

ESC/D20

TCGA92/S226(1) refers to the payment by the dependent relative of `any other consideration’. So, on the wording of the legislation, any payment by the dependent relative to the claimant will prevent relief. Interpreted literally this is unduly restrictive and is relaxed by ESC/D20.

Relief will not be lost where the dependent relative

  • pays all or part of the occupiers council tax or rates, and/or
  • pays the cost of repairs attributable to normal wear and tear, and/or
  • makes other payments, provided that no net income is receivable by the individual, taking one year with another.

It does not matter if the payments are to the individual claiming the relief, for example, a contribution to his or her payment for repairs, or direct to a third party. This is illustrated by the examples at CG65616.