Unsuitable occupation

The taxpayers bought a flat in April 1999 as an investment and then let it. They decided to sell the property in 2007 and accepted an offer in January 2008.

Contracts were exchanged six months later by which time the taxpayers had sold their main residence. They moved into the empty flat on 1 July and stayed there until 25 July when the property’s sale was completed.

The taxpayers claimed only or main residence relief on the flat under TCGA 1992 s 222 and s 223 on the basis they lived at the address for the last 25 days of their ownership of it and did not own another property during the same period.

HMRC decided the 25 days did not amount to occupation and refused the claim. The taxpayers appealed.

The First-tier Tribunal ruled that the quality of the occupation of the flat was...