hello . I'm hoping someone can give me some information/advice as pretty much at my wits end! In 2009/10 we self-built a property in the back garden of our existing house. It is a much more comfortable property than our existing house , big enough to accommodate my elderly parents if need be and designed with downstairs bedroom/bathroom with this is mind. It was always our intention to live in this new house and do holiday letting in the old one. We moved in a few weeks before it was officially "signed off" in spring 2011. But when we had a meeting with the holiday letting agency they said that our old house was not up to scratch for letting and would need significant work etc which we did not then have the means to do. We therefore moved back to the old house and did holiday letting in the new one with a view to saving up the proceeds to improve the old house.. We moved back into the new house over the winter of 2012/13 while some building work was going on in our old house and generally spend time there over the winter months when there are few if any holiday bookings as it is far more spacious & comfortable than our old house! In early 2013 we asked our (then) accountant to contact HMRC to elect the new house as our primary residence within the 2 year timescale he had advised was in place. We never got any confirmation about this from HMRC so I queried it with the accountant in the autumn ( after 2 year deadline was past) and he confirmed he had made the election but would do so again "just in case". All this is in writing via fax & email.
Cut to 2015 and we have had to make plans to retire. This involves selling off the new house as we are not able to survive financially without doing so. Meanwhile our accountant had merged his practice with another who say they cannot locate paperwork relating to the election. Calls and emails to the original accountant go unanswered, though he did say that we would not be able to claim the new house as our primary residence after all because we had not had deeds made up for it when it was built. He never mentioned this at the time.. The new accountants have basically washed their hands of this and just say we will need to talk to the original accountant!!. So my questions are;
1) how can I find out if the election was in fact made as instructed - should I just ask someone at HMRC?
2) If the election WAS made, would HMRC accept the property as our main residence and thus exempt from CGT in the circumstances I've described?
3) If the election was NOT made, where do I stand with HMRC and, what if anything can I do. ?
I'm not sure exactly how the calculation for CGT would be made on the new property ( it would at least be eligible for entrepreneurs relief as a holiday let,) but as the original house/land was bought in 2000 it would be an awful lot of money if not exempt.
Hoping someone can advice me on this problem!
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