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Where Taxpayers and Advisers Meet
It’s the Quality NOT the Quantity!
11/08/2020, by Mark McLaughlin CTA (Fellow) ATT TEP, Tax Articles - Capital Gains Tax, CGT
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Mark McLaughlin highlights an important factor in the availability of Capital Gains Tax Principal Private Residence Relief on the disposal of a dwelling.


A change in personal circumstances can have tax implications, such as affecting the availability of Capital Gains Tax Principal Private Residence (PPR) Relief. For example, a house might be occupied for only a short time before sale, due to a change of plans following a relationship breakdown.

‘Safe’ Occupation?

A common question asked by house owners is how long they must occupy the property before they can claim PPR Relief. However, there is no ‘safe’ period. Furthermore, the property must be the individual’s ‘residence’; courts and tribunals have indicated that ‘quality’ is more important than the length of occupation.  

For example, in Yechiel v Revenue and Customs [2018] UKFTT 0683 (TC), the taxpayer purchased a property in September 2007 as a future matrimonial home. The property needed significant work. The taxpayer applied for planning permission to extend the property and let out the house in the meantime. Planning permission was granted in March 2008. The taxpayer and his fiancée married in August 2008, but in January 2011 his wife instructed divorce lawyers. In April 2011, the taxpayer moved into the property. It was advertised for rent and for sale in October 2011. In December 2011, the taxpayer moved to live with his parents nearby. In August 2012, the house was sold.

Intentions are Important

HM Revenue and Customs (HMRC) challenged the availability of PPR Relief. The taxpayer spent most, if not all, nights between April 2011 and July 2011 at the house. The First-tier Tribunal (FTT) considered that the taxpayer’s intentions at April 2011 were important. He clearly did not want to continue living with his wife and did not want to live with his parents either. The taxpayer needed a home and moved in with the intention of living there for a period of time. However, it was not possible financially for the taxpayer to manage the financial demands of his divorce and maintain a large family home (with a significant mortgage) to live in by himself.

The FTT concluded that the short period of occupation, minimal use of the house other than for sleeping, coupled with use of another house (i.e. the taxpayer’s parents’ home) for eating, laundry and social connection, together with the lack of evidence of a firm commitment to living in the house long-term, and the financial reality that this did not appear possible, meant that the residence did not have sufficient ‘quality’ for the property to qualify for PPR relief. The taxpayer’s appeal was dismissed.

‘Quality of Residence’

It is generally accepted that to qualify as an individual’s ‘residence’ there must be “some assumption of permanence, some degree of continuity, some expectation of continuity” (see Goodwin v Curtis [1988] STC 475).

As indicated, other cases indicate that ‘quality’ of residence is also important. The FTT in Yechiel was specific that ‘quality’ requires not only sleeping at the property but periods of ‘living’ (i.e. cooking, eating a meal (sitting down, unlike the taxpayer!) and generally spending periods of leisure there); property owners seeking PPR Relief should take note.  

The above article was first published in Property Tax Insider (May 2019) (


About The Author

Mark McLaughlin is a Fellow of the Chartered Institute of Taxation, a Fellow of the Association of Taxation Technicians, and a member of the Society of Trust and Estate Practitioners. From January 1998 until December 2018, Mark was a consultant in his own tax practice, Mark McLaughlin Associates, which provided tax consultancy and support services to professional firms throughout the UK.

He is a member of the Chartered Institute of Taxation’s Capital Gains Tax & Investment Income and Succession Taxes Sub-Committees.

Mark is editor and a co-author of HMRC Investigations Handbook (Bloomsbury Professional).

Mark is Chief Contributor to McLaughlin’s Tax Case Review, a monthly journal published by Tax Insider.

Mark is the Editor of the Core Tax Annuals (Bloomsbury Professional), and is a co-author of the ‘Inheritance Tax’ Annuals (Bloomsbury Professional).

Mark is Editor and a co-author of ‘Tax Planning’ (Bloomsbury Professional).

He is a co-author of ‘Ray & McLaughlin’s Practical IHT Planning’ (Bloomsbury Professional)

Mark is a Consultant Editor with Bloomsbury Professional, and co-author of ‘Incorporating and Disincorporating a Business’.

Mark has also written numerous articles for professional publications, including ‘Taxation’, ‘Tax Adviser’, ‘Tolley’s Practical Tax Newsletter’ and ‘Tax Journal’.

Mark is a Director of Tax Insider, and Editor of Tax Insider, Property Tax Insider and Business Tax Insider, which are monthly publications aimed at providing tax tips and tax saving ideas for taxpayers and professional advisers. He is also Editor of Tax Insider Professional, a monthly publication for professional practitioners.

Mark is also a tax lecturer, and has featured in online tax lectures for Tolley Seminars Online.

Mark co-founded TaxationWeb ( in 2002.

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