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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: at 5/4/88: transitional

E acquired a dwelling house in April 1978 and sold it in April 1992 realising a gain of £60,000 before private residence relief. The house was let from April 1978 to March 1981 and then occupied rent free and without any consideration as the sole residence of

  • E’s widowed mother from April 1981 to March 1989 when she died

and

  • E’s widowed mother-in-law from May 1989 to April 1992 when the house was sold.

The private residence relief due in accordance with TCGA92/S226 is computed as follows

  • period of ownership 31 March 1982 - March 1992 = 120 months
  • period of sole residence of E’s widowed mother

31 March 1982 - March 1989 = 84 months

  • final period allowed by Section 223(2) = 36 months(see CG64985+)
The relief due is 84+36 x £60,000 = £60,000
           
  120        

The gain arising is wholly relieved.