Where a person has only one residence, that residence is their only or main residence. Where they acquire a second residence, they have a period of two years to nominate which residence is the main residence for capital gains tax purposes.
While the no gain/no loss rules for transfers between spouses and civil partners is useful from a tax perspective, the same cannot be said to be true for market value rule that applies to transfers between connected persons.
Merely sleeping at a property is not enough to qualify it as a ‘residence’ – you must also do your laundry and cook there to satisfy the conditions.
Where a property has been let, making it the main residence for a period also opens up the opportunity of letting relief to further reduce the gain. The period as a main residence can be after the period of letting.
The appellant was not resident or ordinarily resident in the UK, his share of the goodwill of the business was a chargeable asset in relation to him for capital gains tax (CGT) purposes.
The FTT’s decision (although not a binding precedent, and subject to any appeal) is potentially good news for putative purchasers of dwellings ‘off-plan’ where there is a significant delay between entering into a contract for its purchase and completion of the contract in similar circumstances.
You’re not required to pay Capital Gains Tax on certain assets including ISAs or PEPs, UK government gilts and Premium Bonds and betting lottery or pool winnings.
The merits of taxing foreign purchases are clear, and it couldn’t be more prevalent now as research is suggesting that a high proportion of properties in London that would make suitable homes for first-time buyers are being snapped up by foreign investors.
A Case law about chargeable gain on the disposal of their CGT Private Residence Relief
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