Intention is important

The taxpayer planned to buy a house with the intention of making it his marital home – but his fiancée broke off the engagement before the deal was completed. He went ahead with the purchase and moved in his possessions deciding three months later to let the property and live with his parents.

The house was rented out from 31 August 2001 to 15 March 2006 when the taxpayer moved back in with a view to selling. It was sold in July 2006.

HMRC assessed the taxpayer to capital gains tax on the gain saying the two periods he had stayed in the property had been temporary.

The taxpayer appealed.

The First-tier Tribunal described the case as “extremely finely balanced” and said the taxpayer needed to show only that it had been his intention to make the house his permanent residence when he first moved in....