In W & H Ritchie v HMRC [2017] UKFTT 449 (24 May 2017) the FTT identified the ‘permitted area’ for the purpose of principal private residence relief (PPR) (TCGA 1992 ss 222 to 226).
The main substantive issue was whether PPR applied to the disposal of an entire estate by the Ritchies. The main question was whether the ‘permitted area’ the area of the gardens and grounds that were required for the Ritchies’ occupation and enjoyment of the dwelling house on the land was greater than 0.5 hectares.
The FTT observed that the test for the area of land that is required for the reasonable enjoyment of the dwelling house as a residence is objective. It added that ‘required’ is to be equated with necessary not just desirable. The question was therefore: what amount of garden and grounds is necessary for the enjoyment of the...
