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Property Did Not Become The Taxpayer’s Residence

By Mark McLaughlin, March 2017
The appellant’s appeal against HMRC’s refusal to allow principal private residence relief was dismissed, as the property had not become the taxpayer’s residence.

The appellant ran a property letting business. He lived in a property (P) with his long-term partner and their children, which had been his principal private residence since 1999. In spring 2006, the appellant and his partner suffered a relationship breakdown, and subsequently agreed to a trial separation.

Another property (F) was purchased on 5 January 2007, with the assistance of a buy-to-let mortgage. The appellant owned 99% and his partner 1%; the appellant was assessed on 100% of the gain because of an agreement that he could retain all the sale proceeds. In May 2007, HM Revenue and Customs (HMRC) received a main residence election from the appellant in respect of F, with effect from 5 January 2007. 

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