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Taxpayer’s Stay At Property Was Insufficient To Make It A ‘Residence’

By Mark McLaughlin, March 2019

Capital gains tax private residence relief was not due on the taxpayer’s disposal of a property as her stay there was not sufficient to amount to ‘residence’ for relief purposes. 
 
The appellant purchased a one-bedroom flat (LB) on 20 September 2007, with settlement on 2 November 2007, for £50,000. It was sold, following renovations, on 23 April 2008 with settlement on 1 May 2008 for £115,000, realising a capital gain. The appellant did not declare the gain, on the basis that private residence relief was due (under TCGA 1992, s 222).  
 
On 2 September 2014, HM Revenue and Customs (HMRC) commenced an enquiry into the appellant’s acquisition and disposal of LB. On 12 November 2015, HMRC issued a discovery assessment for the tax year 2008/09 charging CGT on the gain arising from the appellant’s disposal of LB. A penalty was also imposed for failing to notify

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