I would disagree, I think the Class E exemption should be awarded.
The wording for Class E is
an unoccupied dwelling which was previously the sole or main residence of a qualifying person who –
a) has his sole or main residence elsewhere in the circumstances specified in……
b) has been a relevant absentee for the whole of the period since the dwelling last ceased to be his sole or main residence
compare this to the wording for Class K (property left empty by students) which states
an unoccupied dwelling
a) which was last occupied only by one or more students…….
In your case the dwelling is still the previous sole or main residence of Mrs X. She has been permanently resident in the nursing home and has therefore remained a relevant absentee for the whole period since it ceased to be her sole or main.
I think if the intention was to limit the exemption to cases where the relevant absentee was the last occupier similar wording to that in Class K would have been used i.e. was last occupied rather than previously the sole or…
.
