Varty v Lines

51 TC 419; [1976] STC 508; [1976] 1 WLR 1091; [1976] 3 All ER 447.

The taxpayer purchased a house comprising of land of less than one acre. He sold the house with part of the garden and applied for planning permission for the rest of the garden. The remaining land was sold four years after the original sale. The Inland Revenue issued a capital gains tax assessment on the second disposal and the taxpayer appealed, contending that the land had been enjoyed as part of his main residence and gardens and that the gain should be exempt.

It was held that the gain arising on the second disposal was liable to CGT and that principle private residence exemption did not apply to the sale of land after the original sale of the dwelling house.