It is well known that if you make a profit when selling your home (main residence), the gain will not be chargeable to capital gains tax.

The relief (main residence relief) has been open to abuse over the years and this is an area where cases are constantly being brought before the Tax Tribunals.

In Piers Moore vs HMRC TCO2827 [2013] a taxpayer was denied main residence relief despite occupying the property for eight months.

The taxpayer moved into a new house following the breakdown of his marriage and, after living there between three to five months, he put the property on the market.  The house was then sold and the taxpayer moved in with his girlfriend.

Main residence relief was claimed on the disposal of the property although HMRC denied the relief which was then supported by the Tax Tribunal.

The taxpayer paid full council tax on the property but he did not fully change his postal address.  It would appear that the Tribunal had issues over the evidence given by the taxpayer and wanted to see if his new wife would corroborate his story.  She did not attend the hearing.  Whilst these issues may have affected the result, this does highlight the need to be able to provide the appropriate level of evidence to support occupation where main residence relief is to be claimed.

If you are concerned that a property may be chargeable to capital gains tax on disposal, then please do contact us for further advice.

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