No permanence

Only or main residence relief

The taxpayer bought a flat in January 2007 but sold it in April 2007. He claimed only or main residence relief on the gain under TCGA 1992 s 222(5)(a). HMRC did not allow the claim on the ground that he had been ‘engaging in adventure in the nature of a trade’ because after buying the flat he had obtained an extension to the lease thereby substantially increasing its value.

The taxpayer appealed. He said he had bought the flat because he needed somewhere to live when his relationship with his partner had broken down but then sold it when they reconciled.

The First-tier Tribunal found inconsistencies in the taxpayer’s evidence. The photographs used to market the flat for sale in early March showed no furniture. The taxpayer said he had pushed any out of each photograph but the tribunal said...