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BFI Patrons’ and Supporter’s End of Year Screening
Alliotts' Media team attended the BFI’s Patrons’ and Supporter’s End of Year Screening of The Red Shoes.
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A recent case in the First-Tier Tribunal is very interesting
The disposal of a private residence is exempt from capital gains tax (CGT) if used as a main residence throughout the period of ownership. A recent case heard in the First-Tier Tribunal has come up with a very favourable interpretation of what this means.
The facts
In the case heard by the Tribunal:
The decision
The question for the First-Tier Tribunal to decide was whether the period of ownership covered just the new house (one year) or whether it went back to when the land was bought (some two and half years earlier).
Both parties put forward detailed arguments to support their respective positions, but in the end the decision was simply that the natural reading of the legislation was the ‘period of ownership’ means the period of ownership of the house being sold – so the couple’s gains were fully exempt.
It is of course possible that HMRC might chose to appeal the decision.
There may be tax planning scope for anyone sitting on a plot of land representing a potential substantial gain if they can build a house on the land and live in it for a few years before a sale to claim private residence relief.
However the other important caveat to bear in mind is that First-Tier Tribunal decisions do not set a precedent. View HMRC’s guidance on private residence relief here.
If you require any more information, please do contact us.
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