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Upper Tribunal’s decision in Lee on private residence relief

Have your cake and eat it

Key points

  • Mr and Mrs Lee redeveloped a property and made a substantial gain on its disposal.
  • The Lees concluded that all of the gain accruing from 26 October 2010 to 22 May 2014 was eligible for private residence relief.
  • In January 2017 HMRC opened an enquiry into the Lees’ 2014-15 tax returns.
  • The dispute centred around the interpretation of the ‘period of ownership’ wording at TCGA 1992 s 223(1).
  • The Upper Tribunal agreed with the First-tier Tribunal that the ‘period of ownership’ per s 223(1) referred to the period of ownership of the dwelling-house rather than the land.
  • HMRC will not appeal to the Court of Appeal.
  • For taxpayers this decision could open up an opportunity to revisit recent private residence relief claims.

In the ever-evolving landscape of tax legislation and its interpretation few cases have garnered as much attention as CRC v Gerald and Sarah...

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