Rules governing main residence election

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    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 individual’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

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