Have you recently bought a property?
Is it your intention to improve and sell?
Do you think that you are covered by Principal Property Relief?
The HMRC now expect, following 2014 case law, that
• the burden is firmly on the taxpayer to provide evidence that such a residence test is satisfied;
• there exists the necessary evidence as to the actual occupation of the property, and the intention of the owner(s);
• the longer the occupation the stronger the taxpayer’s case should invariably become – BUT that there could be no ‘minimum’ period that necessarily gets one ‘over the line’, and it was noteworthy that some of the cases involved 9 or 10 months’ occupation but the taxpayers failed on their particular facts
• a very short period of occupation may not necessarily be fatal provided the relevant intention to make the property as a permanent home was present at the relevant time, and only cut short unexpectedly;
For most disposals after 5 April 2014, the possible exempt ‘final period of ownership’ was reduced from 36 to 18 months.
This in turn reduces the advantage from being able successfully to claim, on the basis of a relatively short period of occupation, that a ‘second home’ has at some time been ‘the main residence’.