In Mr William & Mrs Hazel Ritchie [2017] TC05911 a shed and land in excess of the 0.5ha permitted area were held to be part of the curtilage to a property for CGT Private Residence Relief. 

This decision was overturned by the Upper Tribunal: HMRC was out of time for an extended Discovery Assessment. HMRC had appealed the PRR calculation however this was not heard further.

The taxpayers appealed against the discovery assessments.

In evidence Mrs Ritchie told the tribunal that her husband had three priorities in life: number 1, the shed; number 2, her and number 3, their children.

The FTT held that the larger shed was part of the curtilage of the property (so qualified for PRR). There was some debate on how this gain should be arrived at. It recalculated the gain (see breakdown below this article).

Was there a valid discovery?

The FTT further held that the first discovery assessment was unlawful as they could not justify how the amount could have been calculated.  However, the overall tax position was considered to revise the second assessment.


There were also a few interesting procedural points regarding the Tribunal itself, which are recorded

As noted above, there are a number of interesting elements to this case and it is well worth reading the detail of the judgement.

Of particular interest to taxpayers will be the reasoning over the shed and land, and to advisers the FTT’s comments on carelessness/negligence.

Our guides

CGT: Private Residence Relief
CGT relief on disposal of your main residence

Garden: selling and developing CGT and income tax
Avoid tax pitfalls with this handy guide

How to appeal a decision of HMRC
Key steps in appealing a decision of HMRC.

How to appeal a tax penalty
Essential reading in cases were there are penalties too

Discovery assessment and time limits
How far HMRC can go back, what conditions must be met for a valid discovery

Penalties: Error in a return or document
How work out penalties for different forms of inaccuracies

DOTAS: Disclosure of Tax Avoidance Schemes
Rules for declaring use of tax schemes

External links

Case Mr William & Mrs Hazel Ritchie [2017] TC05911

Breakdown of gain calculations by FTT

Value when constructed 200,000







Gain 9,100
Split: Total Property Permitted area Remainder
Proceeds 2,000,000 1,714,286 285,714




Legal costs










  (211,357) (207,014) (4,343)
  1,788,643 1,507,272 281,371
PRR   (1,498,172)  
Gain   9,100 281,371