Taxation of income from filming taking place in your PPR

[Incredulum]

An individual has a PPR. He "lets" it out for filming - a film crew turn up maybe once a month and take photographs/film model shots/whatever for a day or two or three. This filming happens in the dining room, kitchen and bedrooms that are normally lived in by the family

1. Is this income from land? Or trading, or "other" income?

2. Are there any CGT implications? If so I assume that 223(3)(a) would cover this - but what when there have been more than 1,095 days of filming? Or in fact should one be adding together the HOURS of filming in order to total three years? Or in fact, are these not periods of absence at all?

[pawncob]

It's trading, as he's letting the "setting", not just the land.
If it's only let for three days a month, it'll take more than 30 years to reach 1095 days! Ignore it.

[msp]

These are not absences in the context of S223. When I go on holiday, whether to a hotel, cottage, Butlins or a caravan site, that is not a S223 absence. I don't move my entire belongings and personal effects to said holiday accommodation, so I neither establish a residence in Skeggy or wherever, and nor do I lose my residence at my home.

[Peter D]

Well put msp, well accept for your proposed stay at Butlins. I see no CGT issue as the property/land is not used wholly exclusively for business. But it is an IT issue as far as the income is concerned. Watch out for Red Coats. Regards Peter

[Incredulum]

These are not absenses in the context of 223.

Are you absolutely certain?

If you rent out a couple of rooms in your house to lodgers, they would be s223 absences.

Butlins is quite different, for nobody else occupies your house whilst you are there, and Butlins does not become your main residence. However if you were to indulge in a home swap whilst you visited New York, you would be within s223.

There is clearly a time during the filming that the filmers have exclusive occupation of rooms and they are not available for the owner.

[msp]

If you rent out a couple of rooms in your house to lodgers, they would be s223 absences.

No, that is non-residential use which calls for Section 224(1) apportionment.

Butlins is quite different, for nobody else occupies your house whilst you are there, and Butlins does not become your main residence. However if you were to indulge in a home swap whilst you visited New York, you would be within s223.

I disagree. HMRC argues that residence has to be to the Goodwin v Curtis standard (a more recent case is Dennis Jehan v HMRC at Tribunal in Birmingham). In Goodwin Lord Justice Millett said "temporary occupation does not make a man resident there". A house swap in New York must be temporary occupation.

A Section 223(3)(b) or (c) absence in respect of employment must mean an absence causing the person to live elsewhere. So surely a Section 223(3)(a) absence involves total absence from the residence rather than just a room or two? I do not believe that Section 223(3)(a) relates to family holidays. What if someone holidays for 2 months each year and lives in the same house for decades. Would it mean that after 18 years their holidays start to eat into their private residence relief? Surely not. I think that Section 223(3)(a) is about other absences, for instance living with friends or relatives.

[Incredulum]

I think you are misunderstanding my implications of a house swap.

Two weeks in New York does not a main residence make in New York. HOWEVER, Two New Yorkers spending a fortnight in your house for consideration (albeit that the consideration is a house swap) I think constitutes a period of absence.

Just as it would if you were to leave your London house and spend a year travelling the world. You could not make your cruise ship cabin (nor your Swiss chalet) a PPR as you would be living there only temporarily, but your London residence you would certainly count the period for which you rented it out as a period of absence.

Or do you think there is a distinction between my two scenarios.



Re 224(1) apportionment, rather than taking a benefit from 223(3) it appears you are completely correct & I am quite wrong. Thank you.

[msp]

Two New Yorkers spending a fortnight in your house for consideration (albeit that the consideration is a house swap) I think constitutes a period of absence.

I disagree again. Apart from a suitcase full of clothes, all of the person's possessions would remain in the UK house. The person would not notify bank, building society, doctor, dentist, utility companies, BT, family, friends etc of a change of address. Remember that "temporary occupation does not make a man resident", so it follows that temporary absence (of similar duration) is unlikely to constitute S223 absence.

Just as it would if you were to leave your London house and spend a year travelling the world. You could not make your cruise ship cabin (nor your Swiss chalet) a PPR as you would be living there only temporarily, but your London residence you would certainly count the period for which you rented it out as a period of absence.

I can see that this would be a S223 absence, although that acceptance appears to contradict what I said above. But there is some logic. Travelling the world for a year is a relatively long period of time and HMRC could argue "absence". In the same way that living in a house for a year is also a relatively long period of time, and a person could logically argue "residence". It's all about intention.

[Incredulum]

I agree with you. Thank you very much for your thoughts.