CG64609 - Private residence relief: gains which do not attract relief

Below is a list of common disposals which may give rise to a gain. Although each of the assets disposed of has some connection with a residence, none of them are disposals of an interest in a residence.

• The disposal of a right to unascertainable future consideration received in consideration for a disposal of all or part of a residence, (a Marren v Ingles right), see CG14850+, and see CG64611 where the right derives from employee relocation arrangements.
• The disposal of shares in a company which owns a person’s residence.
• The receipt of a forfeited deposit.
• The disposal of shares in a company set up by a residents’ association.

For example, a common arrangement is for a company which owns the freehold of a block of flats to be controlled by its residents. Each resident has the lease of a flat and a share in the company. If a resident assigns the lease, they are obliged to sell the share to the assignee, however the share is not a disposal of an interest in the residence so will not attract relief. The share may only be of nominal value, therefore enquiries may not be worthwhile unless you have reason to believe that a substantial gain has arisen on the sale of such a share.