Relief applies to ownership of dwelling house

In 2010 the taxpayers bought land on which there was a house which they demolished. In March 2013 they finished building a replacement property which they occupied until selling it in May 2014. A dispute arose as to the correct only or main residence relief due (TCGA 1992 s 222 et seq).

The First-tier Tribunal found for the taxpayers on the basis that ‘period of ownership’ meant the ‘the period of ownership of the dwelling house that is being sold’.

HMRC appealed. It argued that the total gain related to the ownership of the land which the taxpayers owned from 2010. No relief was available until the house was occupied. So the relief had to be apportioned.

The Upper Tribunal said the ‘core remit’ of the relief was clear: it was directed to the case where someone bought a house lived in it as their main residence...