Rules governing main residence election

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Rules governing main residence election

    If we take the case of a person who owns a flat in London and then decides to buy a second property in the country, my understanding is that the individual can choose which property to nominate as his main residence.

    In some circumstances the person may want to keep the flat as work/social access to London etc. but in fact the new house would be "where he lived", alternatively the new house in the country could be used as an occasional weekend/holiday home.

    Am I right in assuming that having purchased the second property, registered for council tax etc. it is the individualā€™s right to notify HMRC which of the two properties he wants to register as his "main residence for CGT purposes" and that decision can be based on what suits the individual for CGT purposes rather than the use the residence is put to.

    Specifically can HMRC at the time of declaration of nomination of main residence refuse to accept the nomination and if so on what grounds. Also can HMRC at some future date, say, 18 months later, query this election and require proof of what type of occupation was the residence used for.


    #2
    You can only nominate your main residence if you genuinely live in both of them.
    And "occasional weekend / holiday home" wouldn't qualify.

    HMRC have every right to decline a nomination and have 6 years from any tax event to start to investigate and require proof.
    I have no idea if this happens in practice or how frequently.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      If you are paying council tax and all the bills on both places I can't see how they would know the % time you spend in each. Council tax alone is not the crux. Is anyone else staying there, paying rent.

      You also can't re-decide every year or two as it suits you.

      By the way I really love the London approach to the rest of us farmers and peasants -- "second property in the country". What country is that?

      Comment


        #4
        You can nominate only one property as your " main residence" even if you hold 2 properties for personal use. So which one to nominate ?

        Its not decided by the time spent : 5 weekdays ( in the city ) or the 2 weekend days ( in the country ).

        The "main residence" should be nominated for the property expected to the largest capital gain.


        The guide to HMRC for calculating cgt is given in this link :

        https://www.gov.uk/government/public...relief-2017--2


        Comment


          #5
          Originally posted by AndrewDod View Post
          By the way I really love the London approach to the rest of us farmers and peasants -- "second property in the country". What country is that?
          Love it...

          Comment

          Latest Activity

          Collapse

          • Parents transferring property to children
            by dhoops97
            Hi all,

            My dad wants my brother and I to take over the management of his properties, as he's getting old and doesn't want to deal with tenants anymore. However, he doesn't want to sell and he has really good mortgage rates, which doesn't end for another 10 years. His idea was to change...
            16-01-2021, 14:32 PM
          • Reply to Parents transferring property to children
            by jpkeates
            If the mortgages are standard BTL lending, the lender won't allow you to do what you're thinking of.
            I'd talk to a family solcitor, who will probably suggest a trust being set up to achieve what you're looking to do.
            17-01-2021, 11:05 AM
          • Reply to Parents transferring property to children
            by Gordon999
            What is the " approx total value" and "annual income" from dad's properties ?

            Would a gift of 5% interest to each son give rise to much capital gains tax for father ? Would the mortgage company agree to include the 2 sons being included with dad in the mortgage...
            17-01-2021, 07:57 AM
          • Tax expense dates?
            by ben100
            Ok so I have a spreadsheet that goes from April to March for the tax year. I have direct debit for a taxable expense that goes out each month. The direct debit for the April month the following year after the last March on my spreasheet went out on the 1st of April. I know the tax year goes up to the...
            15-01-2021, 11:14 AM
          • Reply to Tax expense dates?
            by Gordon999
            Better to book the cost as "repair to damp proof coarse" and claim the expense against your rental income.
            17-01-2021, 07:26 AM
          • Reply to Another new kitchen and bathroom story- CGT
            by Gordon999
            Renewing of kitchen and bathroom units does not give rise to capital gains .

            Capital gains arises from sale of the property .
            17-01-2021, 07:22 AM
          • Another new kitchen and bathroom story- CGT
            by Celibin
            We have replaced the above (30 years old) prior to first let. The kitchen had to be done as the cooker(Free standing) was dangerous Ie very old Being 58 cm wide it was not possible to find a new one that would fit between the units without leaving quite a gap. Also hard to find new shelves for the interior...
            16-01-2021, 06:40 AM
          • Reply to Another new kitchen and bathroom story- CGT
            by Celibin
            Sorry Gordon I meant the bath not the floor was sloping. So it was no longer fixed very well
            17-01-2021, 06:37 AM
          • Reply to Another new kitchen and bathroom story- CGT
            by Celibin
            The old cooker was dangerous and almost certainly the kitchen cupboards needed pulling out to get behind them to update the electrics
            17-01-2021, 06:36 AM
          • Reply to Parents transferring property to children
            by jpucng62
            I would say you can't transfer property to your children without triggering CGT unless you gave away a very small percentage so that it was under the CGT threshold each year - theoretically possible but a pain to do I would imagine! This is the biggest problem with property - it tends to trigger CGT...
            16-01-2021, 17:00 PM
          Working...
          X