CGT private residence exemption

The CGT exemption for gains arising from a disposal of the taxpayers “only or main residence” is very valuable to individuals. It is also important to trustees who have invested trust funds in purchasing a house for a beneficiary to live in. Under s225 TCGA 1992 the exemption is available to trustees who dispose of a dwelling which has been occupied, as his only or main residence, by a beneficiary who has occupied it under the terms of the settlement, probably a beneficiary with an interest in possession. The exemption is available for the dwelling house itself and also land occupied with the house as garden or grounds of up to 0.5 hectare. Sometimes the exemption will extend to a larger area of garden or grounds, if required for reasonable enjoyment of the house as a dwelling (see s221 (2) and s221 (3) TCGA 1992).