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27 June 2022

What “reasonable enjoyment” means for tax relief on your garden when you sell.


When selling your main home, individuals are generally exempted from Capital Gains Tax by Main Residence relief, subject to conditions. One of these conditions is that the property’s grounds (including the footprint of the property itself) do not exceed 0.5 hectares (or c. 50 x 100 metres, 1.25 acres). 

However, grounds exceeding half a hectare may still qualify for Main Residence relief where, “regard being had to the size and character of the dwelling-house, that larger area is required for the reasonable enjoyment of [the dwelling-house][1]”.

What does “required for … reasonable enjoyment” mean?

It is clear that the above phrase is subjective, so the individual circumstances of the property must be considered to reach a conclusion.

To assist in defining what is meant by ‘required’, the Special Commissioner in Longson v Baker[2] stated: “I am not permitted to take into account the particular requirements of the owner of the dwelling house: it is the house to which I must look”, referring to the above legislation which is focussed on the property itself rather than its owners. 

In Longson, the taxpayer challenged HMRC’s assessment to tax on his disposal of his interest in his main home, a farm with 7.56 hectares of land, to his ex-wife. The taxpayer claimed that, as he and his family kept horses and used the property as a stables and riding school, such large grounds were required for the keeping of the family’s horses. HMRC contended that, although the property’s size and character was sufficient to have an increased area of grounds for its reasonable enjoyment, that area was only 1.054 hectares

Notably, the farm was sold to developers who built other residential properties on its grounds, and the Commissioner believed that they would find a purchaser for the farmhouse despite the reduction. The taxpayer had also kept horses elsewhere previously on smaller grounds for a considerable time. Therefore, the additional land was not deemed to be required and the taxpayer’s appeal dismissed. 

In 2020, a couple appealed against CGT on their 0.94-hectare property[3]. The case was decided with reference to comparable homes in the area, with similar sized grounds. The judgement noted that the properties proposed as comparable by HMRC were noted to be in a suburban, rather than a rural, setting, and had smaller gardens accordingly. The houses chosen for comparison by the taxpayers were altogether more similar and had comparable gardens, which justified the taxpayers’ claim that 0.94 hectares were required for reasonable enjoyment: the appeal was upheld.


While all grounds under half a hectare will qualify for Main Residence relief, properties with larger gardens must be assessed holistically and compared to any similar neighbours to determine if the whole of the grounds will qualify for relief.

With thanks to our contributor Milo Fabian, Accountant at Dixon Wilson.

[1] TCGA 1992 s222(3)

[2] Longson v Baker (Inspector of Taxes) [2005] STC (SCD) 244

[3] Phillips v HMRC 2020 UKFTTT 381 TC

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