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Mixed sales

12 January 2015
Issue: 4484 / Categories: Tax cases , Capital Gains , Only or main residence

TA Hartland (TC4187)

The taxpayer was a self-employed builder. He bought a house (W) in 1996 built an extension and sold it in January 2000. He then purchased another property (P) which he sold two-and-a-half years later.

He acquired another home (G) in September 2002. He demolished and rebuilt it before selling it in February 2004.

He bought a fourth property (N) in January 2004. This too was demolished and rebuilt before being offering for sale the following year.

The taxpayer made money on each of the properties sold but did not declare the profits that arose from the second and third (P and G). HMRC issued a discovery assessment for 2002/03 and amended his tax return for 2003/04 charging income tax on the sales of the two properties.

The taxpayer appealed. He argued he had used both houses as private residences making the gains exempt from...

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