Only or main residence relief claim on property sale

In November the taxpayer bought a one-bedroom flat with the intention of making it a home for herself and her child. She carried out major renovations during which she lived there ‘on and off’. She sold the flat in April 2008 but did not report a capital gain on the ground that the disposal qualified for only or main residence relief (TCGA 1992 s 222).

HMRC disagreed. It assessed her to capital gains tax and imposed a penalty for failure to notify the gain. The taxpayer appealed.

The First-tier Tribunal said there had to be enough ‘documentary or other evidence’ to support a s 222 claim. In this case the taxpayer had not provided evidence such as utility bills of the weeks she lived in the property. Further she did not appear to have taken any ‘modest items of furniture kitchen equipment or personal...