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Main residence relief
I was interested to read query 20,145 and its replies (‘Relief on sale of property of couple living separately’, Taxation, 15 June 2023). It is hard to criticise either response on the basis of the current orthodoxies. However, it might be worth mentioning that I have long held the view that the two-year time limit for nominating a main residence (when a taxpayer has more than one) does not actually exist.
First, I believe that the Griffin v Craig-Harvey case ([1994] STC 54), from which it derives, was wrongly decided. Secondly, a key part of the judge’s reasoning in that case was repealed when self assessment was introduced in 1996. A fuller explanation of my reasoning was set out in my article ‘Playing the chance card’, Taxation, 23 January 2008.
The query and replies also highlight the inherent unfairness of the rules whereby a married couple is taxed less favourably than an unmarried couple. This has, of course, long been a feature of the system, perhaps as a quid pro quo for some of the tax advantages of marriage. Nevertheless, it is questionable as to whether the obvious discrimination highlighted by this case (for example, one spouse to be deprived of main residence relief simply because of the actions by the other spouse) can be justified given the provisions of the Human Rights Act.
Keith Gordon, Temple Tax Chambers.
An automotive work of art
In Joe Neal’s article ‘An automotive work of art’, Taxation, 20 July 2023, under the section on capital gains tax as it applies to cars, the author comments that cars would be exempt as wasting assets, I assume under TCGA 1992, s 45. This surprised me as there is a specific exemption for passenger vehicles in s 263 that would apply to all but single seater cars. This is particularly relevant for businesses that would claim capital allowances as the exemption under s 45 does not apply to assets on which capital allowances may be claimed, whereas the exemption under s 263 continues to apply.
Captain Zed.
