CG65440 - Private residence relief: settled property: entitled to occupy

This condition does not usually cause any difficulty in relation to constructive trusts. A constructive trust is generally implied where a particular person has been allowed to live in a dwelling house. Once you agree that a constructive trust arises the source of that person's entitlement to occupy is straightforward.

It can be more difficult to decide if this condition is satisfied when you are dealing with an express trust. You may have complex trusts over a number of properties, for a variety of beneficiaries, with the trustees having wide discretionary powers. The general principle we follow is derived from Sansom v Peay (52TC1) discussed at CG65443+. TCGA92/S225 is to be interpreted widely.

When a beneficiary of the trust occupies trust property under powers given to the trustees in law, or specifically in the terms of the trust deed, as a consequence of the settlor's bounty, this condition will be satisfied. Relief under Section 225 will be due if the other conditions for relief are fulfilled.