Main Residence Query

[josswallace]

bd6759

Having thought again I would really appreciate your advice on what my rights are concerning HMRC 's stance on this issue.

From the period 1August 2014 to 2 June 2015 we had two properties. A flat in London worth over £1,000,000 which we owned and a derelict house in Hadley Wood (the house was already subject to a planning application to be demolished), and was rented on what amounted to a 6 month contract (actually 12 month contract with break clause for both parties after 4 months with two month notice period). Notice was actually given in January by the landlord but due to a series of mistakes a move out date was agreed with the landlord of 19 April 2015. By mutual verbal consent we did not move out on the 19 April 2015 but from that date the only propert we had any legal right to was the flat we owned.

Our position with HMRC has always been that we were using the rented house initially as our main dwelling and the flat as a london residence when we were up in town. I had contacted HMRC in August 2014 about nominating the flat as our main residence but was under the impression from the reply I got that as we did not own the second propert it was not necessary. I guess what they really ment was the answer you gave me in your last post.

At the moment I have no idea what HMRC's stance is on this issue other that the fact that they ore disputing the CGT relief we are claiming. In terms of making a final decision on how to argue the case against HMRC it would be advantageous for us to know what their view is as to which of our dwellings was a residence. Specifically I would want to know whether they accept thae fact that the flat was a residence in the normal meaning of the term and if they don't what are they claiming, that the rented house was a residence or are they claiming that someone who owns a property worth over a million and rents a house at £24 grand a year does not have a residence.

Am I within my rights wanting clarification on these points before putting a case to the first tier Tribunal.

[bd6759]

Asked and answered 2 pages ago.

HMRCs argument is likely to be that the London flat was not a residence. The simple litmus test is that you sold it. If you wanted it to be a residence you wouldn’t have done that.

[josswallace]

bd6759

I appreciate what you are saying but I would still like to clarify the residency issue. I have nominated our flat as our main residence and unless HMRC argue that the nomination is not accepted then it all boils down to the residency isue.

For the period in question either, neither of the residencies qualified to be descibed as a residence or, because there were two properties then one of them did qualify as a residence as we had to live somewhere.

They are two completely different propositions and I think it important to know which proposition I am discussing.

Apologies again if you think I am being dense.

[bd6759]

You can only nominate a residence if you have two or more residences. So of course it boils down to residence issue. That is what makes your nomination valid.

We covered all this on page one.

Your flat was not a residence. Your nomination is not valid. You are not entitled to residence relief.

[josswallace]

Your comment still does not answer the question I raised eearlier which is.......Is it a reasonable assumption to make that for the best part of a year a person who owns a property and rents a second property does not have a residence.

Because if the answer to the above question is no it then becomes an issue of which of the two properties is the residence.

[bd6759]

..Is it a reasonable assumption to make that for the best part of a year a person who owns a property and rents a second property does not have a residence.

If it is based on facts, it it not an assumption.

It is perfectly reasonable to argue that the London flat was not a residence based on the facts.

The only fact we know is that you put the flat up for sale soon after the last tenant moved out. That is a strong, almost unassailable, indicator that you did not intend for the flat to be a residence.

[josswallace]

I agree its a perfectly reasonable argument that the flat was not a residence but it still does not answer the question I asked which was does one of the two properties qualify as a residence

[bd6759]

You were told on page 1 that neither might be a residence. Based on the scant facts, that seems to be the case.

• The flat was not residence because you wanted to sell it.

• The house was not a residence because it was earmarked for demolition before you moved in. It was always going to be a stop gap.

I suspect that HMRC have explained this to you, but you are just refusing to listen to them.

[josswallace]

Thanks I obviously had not picked up your earlier points.

HMRC have made no effort to explain anything to me other than to say they believe that the flat was not a residence.

Obviously what you have told me is not good news for me but again many thanks for sparing the time.

[bd6759]

HMRC have made no effort to explain anything to me other than to say they believe that the flat was not a residence.

And as I said at the start, that is all that HMRC are looking at. It is the flat you have sold.