Taxation of Chargeable Gains Act 1992 Schedule 7C paragraph 6

Dwelling-houses: special provision

Section 6 of Schedule 7C denies or claws back relief under the share plan transfer provisions where the replacement asset is a dwelling-house, part of a dwelling-house, land, or an option over such property that qualifies (or comes to qualify) for private residence relief.

• Where the replacement asset is a dwelling-house or land that could qualify for private residence relief at any point between acquisition and the time relief is applied, it is treated as not being a chargeable asset — effectively denying the rollover relief from the outset.
• Where relief has already been given but the dwelling-house or land later becomes the claimant's (or their spouse's or civil partner's) only or main residence qualifying for private residence relief, the asset is retrospectively treated as not chargeable, and any resulting gain is deemed to accrue at the earliest time the property qualified for private residence relief.
• The same denial and clawback rules apply where the replacement asset is an option to acquire a dwelling-house or land, once that option has been exercised and the acquired property qualifies for private residence relief.
• References to an individual throughout these provisions include a person entitled to occupy under the terms of a settlement, such as a beneficiary with a right of occupation under a trust.