Properties were lived in as main residence

The taxpayer bought and sold at a profit three properties all of which needed renovation in London. He and his wife lived in all of the properties while they were being renovated. They moved to be closer to the wife’s parents.

The taxpayer considered no tax was due because each property was his main residence and therefore only or main residence relief applied.

HMRC concluded the transactions were trading in nature and subject to income tax. Alternatively if the disposals were capital in nature they were not eligible for only or main residence relief because the taxpayer did not live in them as his main residence.

The taxpayer appealed.

The First-tier Tribunal said it could see why HMRC formed the view that the transactions were trading in nature. There was a series of three transactions all of which involved the acquisition and disposal of residential property within...