CG64827 | Private residence relief: permitted area: location of the permitted area

S222(4) TCGA92 sets out that where the garden and grounds occupied and enjoyed with a dwelling-house are in excess of the permitted area, the part to be determined as the permitted area is the part “most suitable for occupation and enjoyment with the residence.”

If the grounds of a residence are not all of equal value, for example if part of the grounds has development value, it may be just as important to determine the location of the permitted area as it is to determine its size.

Again, this is a matter for the Valuation Office (VO) to determine. As well as determining the extent of the permitted area, the District Valuer will also provide you with a plan showing the location of the permitted area. This decision can be appealed by the taxpayer in the same way as the decision on the extent of the permitted area.

In identifying the ‘most suitable’ garden or grounds, the District Valuer will give consideration to existing features such as the lie of the land and mature trees etc. but the location of the permitted area should not be inhibited by the position of existing paths, gates, fences etc. No undue concern should be given to odd parcels of land falling outside the permitted area that may appear to become land-locked or unusable. This is not important as the test solely has regard to the enjoyment of the residence itself and does not relate to financial or other considerations.

Buildings which form part of the entity of the dwelling-house must be included within the ‘permitted area’. Similarly, any buildings which do not qualify for relief by reason of their use or occupation must be excluded from the ‘permitted area’. Outbuildings which are not excluded from relief by reason of their use or occupation but do not actually form part of the entity of the dwelling-house will qualify for relief if they are sited on the land identified as being the permitted area. The presence of any such buildings may be taken into account in deciding which part of the garden or grounds are the most suitable.