Second Home Flip falls foul of HMRC

A recent tribunal result in HMRC’s favour follows on from a series of recent cases in which ‘quality of residence’ overides the paper trail, when it comes to establishing a property as a Principal Private Residence (PPR), and thus avoiding or reducing Capital Gains Tax on disposal.

In this case Mr and Mrs Harte inherited a second house ‘Alder Grove’, and prior to its sale, made a formal election under s 222(5) TGCA 1992 to nominate the house as their main residence for a brief period.  HMRC denied PPR relief on the basis that Alder Grove had never been their Private Residence.  The Hartes appealed on the basis that they had occupied the property, although no record had been kept of the dates.

The Tribunal agreed with HMRC that there was neither the quality of occupation nor the intentions in respect of the occupation of the property to satisfy the test of “residence” in the legislation.

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Our more detailed published article on this case can be read here