CGT private residence exemption

If the long-standing owner of a dwelling house has only lived in it as his private residence during a short period out of a long period of ownership, a time apportionment formula would be expected to ensure that only a small proportion of the gain will be exempt. However, unless the period of ownership has been very long indeed, even a relatively short period of resident can ensure that a significant exemption will be available. This is because the terms of s223 (2) TCGA 1992 make it clear that, effectively the last three years of ownership will be treated as a period of residence in carrying out the time apportionment. There have, therefore been a number of cases in which the taxpayer has sought to argue, before the First-Tier Tribunal, that a dwelling house has been his principal residence for a short period of time. The Revenue has sought to counter this with the argument that while the taxpayer may have been physically in occupation, it could not be said that the occupation had the quality of being occupation “as a residence”. Yet again, the Tribunal has ruled against the taxpayer on this account in Bradley v HMRC [2013] UK FTT 131.