The disposal of a dwelling house and grounds located on a farm did not satisfy the requirements for capital gains tax rollover relief.

The appellants purchased a farm (‘Chapel Mains’) consisting of 667 acres in 1994. They farmed in partnership. Chapel Mains was sheep and arable farming. The appellants’ son, who had been attending university, subsequently returned to the farm and worked full-time in the farming business.

The son (and his family) lived in one of two adjoining cottages on the farm. The other was let as holiday lets. The appellants lived in the nearby farmhouse.