Private residence relief

[Tom345]

Hello. Can anyone help, please.
We purchased a run-down house in late 2013 intending to renovate and then move into it. It was uninhabitable during renovations and so we remained in rented accommodation during the process. At the end of the renovation (Spring 2014), however, we changed our minds about the house (we didn't like it!) and hence did not move in and sold it instead. It was the only house that we owned and our intention had been to move into it and so we believed this was our primary residence (certainly it was the only property we owned). We therefore did not declare the sale or the small profit we made (approx. £25 000, although this was never the aim!).
Were we correct or have we made a mistake?
Any help / advice very gratefully received.
Thank you.

[bd6759]

...we believed this was our primary residence (certainly it was the only property we owned). We therefore did not declare the sale or the small profit we made (approx. £25 000, although this was never the aim!).

Could you really believe that a house you never lived in could be your primary residence?

The gain will be taxable. Either income tax or capital gains tax will apply. You will need a convincing argument to persuade HMRC that you bought a property to live in, renovated it yourself and then decided that you didn't like it. If they are persuaded, it will be CGT. Otherwise this is a trading venture and will IT.

[amingram]

Simply owning a single property, does not mean tht property will automatically be your principal prvate residence.

Along with the intention to reside there, you need to be able to show that a) it was inhabitable (basic furnishing at least) and b) you did actually sepnd at least one night there.

Given you state the property was uninhabitable, I fear that your rented premises were where you resided during the period.