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As well as there being the ‘intention’ to occupy there must be a degree of permanence in order for Principal Private Residence relief (PPR) to be allowed, as cited in the tax case of Moore v HMRC (2013).

 

Mr Moore bought a house with the intention of renovating it and living in it. He worked in the building trade. Soon after finishing building Mr Moore and his fiancé had disputes with the neighbours and decided not live in the property. It was decided to let out the property. The property was let until its disposal five years later.

 

Mr Moore argued that he alone lived at the property as his PPR during the period from the completion of the works for about three months and that the property was, as a result of this, his PPR and qualified for PPR relief for three years and three months of the ownership period, i.e. the three months occupation and the last three years being treated as occupation. It was claimed that remaining time be allowed under the ‘letting relief’ rules.

 

As Mr Moore could produce no documents to support his claim that the property was intended to be his PPR, the Tribunal decided that the property was only occupied for renovation to a standard suitable for rental. HMRC presented evidence that Mr Moore had repeated the scenario with another property three years later. 

 

The Tribunal therefore agreed with HMRC that Mr Moore’s occupation of the property ‘did not have the “quality” that turned mere occupation of it into its being his residence.’