Taxation of Chargeable Gains Act 1992 section 226B

Exception to section 226A

Section 226B provides an exception to the restriction on private residence relief where heritage maintenance settlement trustees have made an appropriate election.

• Section 226A restricts private residence relief where holdover relief under section 260 has been claimed on gifts subject to inheritance tax — section 226B carves out an exception to that restriction for heritage maintenance settlements.
• The exception applies where trustees have elected under section 508 of the Income Tax Act 2007 for special heritage maintenance income treatment to apply to the settlement, or any part of it, for every tax year in which a relevant earlier disposal occurred.
• A "relevant earlier disposal" is the earlier gift on which a holdover relief claim was made — the disposal that would otherwise trigger the section 226A restriction.
• The election must cover each year of assessment in which such an earlier disposal was made; if the election is not in place for every relevant year, the exception does not apply.