CG64934 | Private residence relief: ownership period: relief denied by rules in FA 2004: example

Amar acquired his house from the trustees of a family trust on 23 January 2004. A claim to gift hold-over relief under s260 TCGA92 was made on that disposal by Amar and the trustees. Amar will not be entitled to private residence relief when he disposes of the dwelling-house.

This example illustrates how s226A TCGA92 denies relief. In practice it is unlikely that the claim would be made because of the tax consequences. In theory, the claim to gift-hold over relief could be made after Amar had disposed of the property. In that case the gain on the 23 January 2004 disposal would be re-calculated to give the gift hold-over relief and the private residence relief given on Amar’s disposal would be withdrawn.