Taxation of Chargeable Gains Act 1992 section 226

Private residence occupied by dependent relative before 6th April 1988

Section 226 provides a capital gains tax relief for individuals who dispose of a dwelling-house that was occupied rent-free by a dependent relative, provided the qualifying conditions were met on or before 5th April 1988.

• Relief applies only where a dependent relative was the sole occupant of the property rent-free and without other consideration, and this arrangement was in place on or before 5th April 1988
• If the dependent relative ceases to be the sole resident of the property, no new period of occupation by the same or any other dependent relative from 6th April 1988 onwards can qualify for relief
• Only one dwelling-house (or part of one) can qualify as a dependent relative's residence at any one time, and a married couple or civil partners living together share a single entitlement between them
• A dependent relative is defined as a relative incapacitated by old age or infirmity, or the individual's or spouse's mother who is widowed, separated, or single following divorce or annulment — the relative's income level is irrelevant