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Last 36 months
Our client purchased a property prior to March 1982 for his parents to live in. Dependent relative relief under TCGA 1992, s 226 applies. His father died first and his mother died in 1991. Since then the property has been let. S 226 allows such relief as would be given under TCGA 1992, ss 222 to 224 if it had been our client's only or main residence. It would thus appear that the 'last 36 months' relief and the lettings relief are available. However, the Revenue's Capital Gains Manual at paras CG64718 and CG65662 denies lettings relief.
Last 36 months
Our client purchased a property prior to March 1982 for his parents to live in. Dependent relative relief under TCGA 1992, s 226 applies. His father died first and his mother died in 1991. Since then the property has been let. S 226 allows such relief as would be given under TCGA 1992, ss 222 to 224 if it had been our client's only or main residence. It would thus appear that the 'last 36 months' relief and the lettings relief are available. However, the Revenue's Capital Gains Manual at paras CG64718 and CG65662 denies lettings relief.
In Mr Hutton's letter in Loose Ends (Taxation, 13 May 2004) he suggests that the Revenue's exclusion of lettings relief is based on the old wording of s 223 which specifically extends relief to settlements under s 225 and 'therefore' does not extend to s 226.
The wording has now been removed and indeed FA 2004, Sch 22 para 2(2) reads 'omit the unnecessary words "or those provisions as applied by s 225"'.
Is lettings relief in fact due, or is there currently any substance in the Revenue's position?
(Query T16,546)
