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V and S Wagstaff (TC3183)
Mrs W sold her flat to her son and his wife, the taxpayers, for £45,000 in February 1996. The deal included an agreement that she was entitled to continue living in the property for the rest of her life or until she remarried, subject to a payment of £5,000.
The flat was sold in March 2007 because it was no longer suitable for Mrs W.
The taxpayers claimed only or main residence relief under TCGA 1992, s 225 on the basis the flat was a settled property. HMRC refused the claim.
The First-tier Tribunal said the taxpayers assumed the role of trustees when the bought the flat and did not become absolutely entitled to the property. Their interest was settled property in that it was held in trust other than property to which s 60 applied.
The taxpayers were entitled to s 225 relief. Their appeal was allowed.
