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HMRC internal manual

Capital Gains Manual

Land: exchange of joint interests: private residences

Relief should not be allowed where the land in which the further interest is acquired is, or at any time has been or becomes, the only or main residence of the transferee (or his dependent relative) such that relief under the private residence relief provisions of TCGA92/S222-TCGA92/S226, see CG64200+, would be available on the occasion of a disposal of that land.

However, where the subjects of the exchange are dwelling houses which are the respective residences of the individuals exchanging the interests, see CG65150+.

Where the land in which the further interest is acquired is first used as a private residence by the transferee after that acquisition, the roll- over relief claim will need to be reviewed. In practice, no adjustments should be made more than six years after the year of assessment in which the exchange of joint interests takes place.

Where relief is given against an interest in land which seems suitable for use as a private residence, a forward note should be made to review the position at, say, the three or five year points after the date of acquisition in order to ensure that the property has not become the only or main residence of the transferee.