Pre-incarnated dwellings and main residence relief

We recently advised a couple who had disposed of land which they had acquired with a residence on it which they had demolished in order to build a new home. In this article we consider how main residence relief applies in such circumstances.

Relevant legislation

TCGA 1992 s 223(1) provides: ‘No part of a gain to which s 222 applies shall be a chargeable gain if the dwelling-house or part of a dwelling-house has been the individual’s only or main residence throughout the period of ownership or throughout the period of ownership except for all or any part of the last 9 months of that period.’

Similar provisions are made in s 223(2) in respect of dwelling houses which have been the disponer’s main residence only for part of his period of ownership.

TCGA 1992 s 222(1) provides:

‘This section applies to a gain accruing to...