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Veronica and Stephen Wagstaff v HMRC

In Veronica and Stephen Wagstaff v HMRC (TC03183 – 7 January 2014) the issue was whether a dwelling had become ‘settled property’ under a trust. If it had then under a combination of TCGA 1992 s 223 and s 225 as the dwelling was the occupier’s principal residence the gain triggered on sale of the dwelling was not taxable.

Veronica had sold her flat for £45 000 to her son Stephen in February 1996. The sale was subject to a brief agreement under which Veronica was entitled to continue living at the flat at no cost for the remainder of her life or until her remarriage subject to payment of £5 000.

The tribunal found that Stephen had only subsequently re-sold the flat with the agreement of his mother and that he had therefore not become absolutely entitled to the flat in February 1996 but...

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