Upper Tribunal’s decision in Lee on private residence relief

11 December 2023 / Lizzie Murray , Luke Gainham

Issue: 4917 / Categories: Comment & Analysis , Only or main residence , Capital Gains

Have your cake and eat it

In the ever-evolving landscape of tax legislation and its interpretation few cases have garnered as much attention as CRC v Gerald and Sarah Lee [2023] UKUT 242. The case has set a significant precedent in the field of private residence relief (PRR) and it serves as a stark reminder of the intricacies of tax legislation and the potential challenges that can arise when dealing with substantial assets such as property.

Background of the case

Mr and Mrs Lee jointly purchased a freehold interest in a plot of land 8 Nuns Walk on 26 October 2010 for £1.697m. Between October 2010 and March 2013 the Lees undertook extensive redevelopment work on the land demolishing the original house to make way for a new dwelling. The work on constructing the new house was finalised in March 2013 and the Lees moved into the...

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