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Yechiel and the only or main residence test

19 February 2019 / Ximena Montes Manzano
Issue: 4684 / Categories: Comment & Analysis
A step too far?

Key points

  • To be exempt from capital gains tax an only or main residence must have a degree of ‘permanence’ and ‘continuity’.
  • A change of personal circumstances resulted in the taxpayer occupying a previously let property.
  • The taxpayer led a spartan lifestyle often eating at his parents’ house and taking his laundry there.
  • The tribunal held that the ‘quality’ of occupation was diminished by significant time being spent elsewhere.
  • What effect might the tribunal’s approach have when people spend more time away from their homes?
  • Should a frugal lifestyle have tilted the balance against a finding of occupation as a residence?

Readers will be familiar with the exemption from capital gains tax for only or main residences in TCGA 1992 s 222 and with the requirement that such a residence has a degree of ‘permanence’ and ‘continuity’. The concepts of permanence and continuity originate from a judgment handed down by the Court of Appeal...

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