Tax Forum :: Free Tax Advice

My Brother and I acquired a dwelling house in August 1986 and sold it in December 2018 realising a gain of £350,000. The house was provided rent-free and without any other consideration as the sole residence of our parents (aged 68 & 53) from August 1986 to October 2008 and then by our widowed mother until December 2018 when she died (aged 85).
Do we qualify for Dependant Relative Relief?

Yes.
The conditions are that the house had to be occupied by a dependant relative on 5 April 1988, and the relief was due for the period during which that relative occupied the house.

Many Thanks, its good news that we are within the qualifying period.

The area that concerns us is how HMRC define a ‘dependant relative’:-
1. Between 1986 and 2008 the property was occupied by both our parents, effectively dependent relatives, all the examples I’ve seen only relate to a single relative.
2. Although my Parents were financially dependent on us to purchase the property my mother was aged 53 in 1986 and at that point couldn’t be considered as incapacitated by age or infirm, although this did change later.

Are HMRC likely to say we meet the qualifying period, but not the dependent relative criteria?

I see your conundrum. It not something I have come across or considered before, but it does seem that DR relief expired on the passing of your father.

From memory DRR only applies to a dependent relative (singular). Married couples don't qualify. Women must be widowed, separated or a single woman in consequence of dissolution of marriage. TCGA 1992 s226. FA 1996 Sched 20 para 61.