Taxation of Chargeable Gains Act 1992

[F1 248E Relief on disposal of joint interests in private residence U.K.

(1) This section applies where conditions A to E are met.

(2) Condition A is that a person (“the landowner”) and one or more other persons jointly hold an interest in two or more dwelling–houses.

(3) Condition B is that the landowner disposes of an interest (“the relinquished interest”) in one or more of the dwelling-houses to the co-owner or to one or more of the co-owners.

(4) Condition C is that the consideration for the disposal is or includes an interest (“the acquired interest”) in one of the other dwelling–houses.

(5) Condition D is that as a consequence of the disposal (taken together with any related disposals)—

(a) the dwelling-house in which the landowner acquires an interest becomes the only or main residence of the landowner, and

(b) each of the other dwelling-houses becomes the only or main residence of one (and only one) of the co-owners.

(6) Condition E is that if each dwelling-house were disposed of immediately after the disposal (or disposals) mentioned in subsection (5) then by virtue of sections 222[F2 , 223 and 223B] (private residences) no part of the gain accruing on each of those disposals would be a chargeable gain.

(7) The landowner, on making a claim jointly with the co-owner or co-owners, shall be treated for the purposes of this Act—

(a) as if the consideration for the disposal of the relinquished interest were of such amount as would secure that on the disposal neither a gain nor a loss accrues, and

(b) as if the acquired interest were acquired by the landowner—

(i) at the time it was acquired jointly by the landowner and the co-owner or co-owners, and

(ii) for a consideration equal to the amount of the sums that would have been allowable under section 38(1)(a) and (b) (acquisition and disposal costs etc) as a deduction in the computation of any gain on a disposal of the acquired interest by the co-owner or co-owners.

(8) For the purposes of this section—

(a) “co-owner” means any person who holds an interest in a dwelling-house jointly with the landowner;

(b) references to holding land jointly are to holding land—

(i) in England and Wales, as joint tenants or tenants in common,

(ii) in Scotland, as joint owners or owners in common, or

(iii) in Northern Ireland, as joint tenants, tenants in common or coparceners;

(c) a related disposal (in relation to a disposal mentioned in condition B) is a disposal of an interest in a dwelling-house which is made—

(i) by the landowner to a co-owner, or

(ii) by a co-owner to the landowner or another co-owner,

at the same time as the disposal mentioned in that condition;

(d) spouses who are living together, or civil partners who are living together, are together treated as a landowner or a co-owner.]

[F3 (9) This section applies in relation to cases where, immediately before the disposal, the land is held by a partnership comprising the landowner and the co-owner or co-owners (whether the partnership is formed in Scotland or elsewhere) as it applies in relation to other cases (and the partners are regarded as the landowner and the co-owner or co-owners for the purposes of this section).]

Textual Amendments

F1 Ss. 248A-248E and cross-heading inserted (with effect in accordance with art. 8(2) of the amending S.I.) by The Enactment of Extra-Statutory Concessions Order 2010 (S.I. 2010/157), arts. 1, 8(1)

F2 Words in s. 248E(6) substituted (with effect in accordance with s. 24(11) of the amending Act) by Finance Act 2020 (c. 14), s. 24(8)

F3 S. 248E(9) inserted (6.4.2023 in relation to disposals made on or after that date) by Finance (No. 2) Act 2023 (c. 30), s. 43(2)(3)