The next step

About the Tribunal’s ruling

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HS283 Private Residence Relief (2022)

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HMRC rewrites rules on private residence relief

Tribunal ruling. We recently told you about the Upper Tribunal’s judgment in the dispute between Mr and Mrs Lee and HMRC ( yr.24, iss.3, pg.2 , see The next step ). The ruling overturned HMRC’s longstanding view of when ownership begins for the purposes of capital gains tax private residence relief (PRR), specifically where a person builds a home on land they already own. The Tribunal decided that for PRR purposes ownership starts when the home is ready for occupation and not when the land was acquired to occupy. As we expected, HMRC has chosen not to appeal against the decision but instead has changed its guidance to comply with it. Revised guidance on PRR has been added to HMRC’s Helpsheet HS283(Private Residence Relief) . HMRC internal guidance will also be amended (see The next step ).

For a previous article about the Tribunal’s ruling and a link to HMRC’s guidance, visit https://www.tips-and-advice.co.uk , Download Zone, year 24 issue 7.