Failed only or main residence relief claim

The taxpayer bought a flat and sold it a few years later. She did not file a return because she believed only or main residence relief applied to the gain (TCGA 1992 s 222). HMRC disagreed and issued a discovery assessment against which she appealed.

The taxpayer said the discovery had become stale by the time the assessment was raised in January 2015 because HMRC had made the discovery in 2012. She referred to two sentences in an unsigned witness statement by an HMRC officer in support: ‘HMRC Portsmouth Office made an enquiry of [the appellant] in May 2012 and it was concluded that [the appellant] had failed to notify chargeability. The papers were referred to local compliance fraud.’

The tribunal decided the failure to notify chargeability was not by itself enough to constitute a discovery. It was more a decision that more questions needed to be asked....