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Where Taxpayers and Advisers Meet

CGT on sale of residence by disabled person

Brightonian
Posts:120
Joined:Wed Aug 06, 2008 3:31 pm
CGT on sale of residence by disabled person

Postby Brightonian » Fri May 14, 2021 3:15 pm

Hello, I am hoping someone can help me interpret S.225E TCGA1992. I have a disabled client who has just sold his previous main residence (Property A) which is in his sole ownership. He married a few years ago and he and his wife made a joint election in favour of his wife's property (Property B) which is in her sole ownership. They currently occupy a rented property (Property C), as he is unable to manage stairs and needs a single storey residence. I note that S225E applies where a disabled person sells a property and 'does not have any other relevant right in relation to a private residence'. CG64986 in the HMRC CGT Manual interprets this to mean that he 'owns or holds an interest in a dwelling house (or part) other than that in relation to which the gain accrued' and S.222 could apply to that interest. He does not hold an interest in Property B (but does the election mean that he is deemed to hold an interest in it?). Nor does he hold an interest in Property C to which S.222 could apply (I think - I know there can be problems with rented properties). Does the forum think he can claim S225E relief? If he is deemed to hold an interest in property B, could this be nullified by electing for Property A to be his main residence for a week or so around the time of sale? I should be grateful for any light anyone can shed on the matter. There is not a huge amount of tax at stake but my client has MND and I would like to save him some money if I can.

pawncob
Posts:4697
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: CGT on sale of residence by disabled person

Postby pawncob » Fri May 14, 2021 4:38 pm

The joint PPR election confirms that both parties are in agreement as to which property is to be the PPR. It does not give any rights to another property, so the wife's property remains her sole property and it is not deemed to be within the husband's ownership. The amendments to TCGA 1992 do not appear to clarify matters.
With a pinch of salt take what I say, but don't exceed your RDA

Brightonian
Posts:120
Joined:Wed Aug 06, 2008 3:31 pm

Re: CGT on sale of residence by disabled person

Postby Brightonian » Sun May 16, 2021 11:32 am

Thank you for taking the trouble to help. I am inclined to claim the relief.


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