CA 1981, 55 TC 550;  STC 521;  1 All ER 61
The taxpayer owned a house and 1.1 acres of land but during part of the period of ownership, lived in a flat in London. He made an election for the larger property (and land) to be treated as his principle private resident. As a result of a number of local burglaries and the difficulties of maintaining the property, he built a chalet bungalow which was occupied rent-free by a part-time caretaker. The bungalow was separate from the main dwelling house and had its own access road. The properties were separate for rating purposes. The taxpayer returned to occupy the property and, no longer requiring the services of the caretaker, sold the bungalow along with part of the land.
The Inland Revenue issued a CGT assessment. The taxpayer appealed, contending that the disposal was exempt as disposal of part of his main residence.
It was held that the bungalow was part of the taxpayer’s main residence. ‘Dwelling-house’ for these purposes can include several buildings, which do not need to be physically attached and therefore the bungalow formed part of the taxpayer’s residence.