I have a situation thus:
As at 1 June 2015 a property was settled into a lifetime settlement and s260 h/o relief applied for. At that time, the gains were £100,000. From 1 June 2015, one of the beneficiaries of the settlement occupied the property as his PPR so my understanding is that from that point, s225 TCGA 1992 applied.
As at 1 June 2023 the trustees decided to sell the property and, by now, the total gains are £150,000 (i.e., £50,000 more than when the settlement was created).
The question is does s225 mitigate all £150,000 gain or just the £50,000 since the settlement was created?
You can’t have PPR as h/o relief applied for. It’s one or the other.
I think further investigation of the position is required in the light of CG65400 which states;
TCGA92/S226A may deny or restrict the relief if there has been an earlier claim to holdover relief under TCGA92/S260.
CG65440 is also relevant.
CG65440 - Private residence relief: rules for disposals made on or after 10 December 2003: trustees
contains the statement that;
The trustees cannot claim relief on a disposal (the later disposal) if the acquisition cost of the property has been reduced by a gift hold-over relief claim under TCGA92/S260 made by any person on an earlier disposal.
Thanks very much both of you.
As hold-over relief was available on initial settlement the trust would not have been settlor-interested.
Thus, the gain could be held-over but this gain and any gain accruing subsequently to the trustees could not qualify for PPR.