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A Dickinson (TC3037)
The taxpayer owned a house with substantial grounds – part of which she sold in 2007 for the development of four houses by a company of which she was a director.
She claimed only or main residence relief under TCGA 1992, s 222 on the disposal.
HMRC refused the claim on the basis the land was already under development when the contracts were exchange. It had to be available to the owner as “garden or grounds” on the date it was sold for relief to be granted.
The First-tier Tribunal found that the company had been allowed on to the land to begin foundation work “on an informal basis”. The land had retained its character as garden or grounds until contracts were exchanged.
The company starting work did not constitute a disposal of the land, meaning only or main residence relief was due.
The taxpayer’s appeal was allowed.
