Occupation by employees of the owner

When the disposal of a subsidiary dwelling-house is in issue it is unlikely to qualify for PRR (assuming that it can pass the now re-stated ‘entity’ test based on the curtilage concept) except in so far as it is occupied by the taxpayer's domestic employees. This is a consequence of the requirement that it is the residence of the taxpayer whose occupation has to be served. Thus, there was no doubt in Lewis (HMIT) v Lady Rook [1990] BTC 9 that the gardener's tenure of the cottage was essential to the taxpayer's well-being, and in the other cases there was no serious attempt to dispute that the employees needed to live where they did to perform their duties.

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