CG65220 | Private residence relief: purpose of realising gain: S517M ITA07

Section 517M ITA07 (formerly s767 ITA07 for disposals before 5 July 2016)

Restrictions to relief under s224(3) TCGA92 most commonly arise where expenditure has been incurred in connection with the reconstruction or redevelopment of a building. You should begin by considering whether any profits which have arisen can be regarded as arising from a venture in the nature of trade.

This could lead to the application of rules regarding Transactions in UK Land, contained in Part 9A ITA07.

Section 517M ITA07 exempts the Part 9A ITA07 Transactions in UK Land rules from applying when sections 222 to 226 TCGA92 apply to the sale of a private residence, or would have done if not for s224(3) TCGA92 – acquisition of a dwelling-house, or an interest in a dwelling-house, wholly or partly for the purpose of realising a gain from its disposal.

See BIM60375 for further details.