Private residence and marital split

Private residence and marital split

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Back in 2002 I purchased a property, in addition to the family home, as my wife and I were undergoing severe marital difficulties. I moved out of the family home and into the new property, living there for around six months. My wife and I then reconciled, I moved back into the family home and we began to let the second property.

After our reconciliation my accountant at the time, now sadly deceased, advised us to elect for the second property to be our main residence, for the period of my occupation, and we completed, signed and filed the necessary elections.

The second property was sold in 2008 and CGT calculations made on the basis of six months + 36 months private residence relief, resulting in no taxable gain. The Revenue are now stating that they have no record of the election ever being made and are baulking at our claim for private residence relief on the property.

Can anyone help or offer any advice on this?

Many thanks in advance
John

Replies (2)

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By AnonymousUser
08th Apr 2009 14:10

Maybe you, not wife
I would continue the arguement for yourself and provide HMRC with copies of solicitors letters regarding the separation. If you do not have these, it is hard to prove you were legally separated.

However, it appears your wife is also claiming relief as you mention 'we' and 'our'. I would not think you have as much chance with her receiving relief as she never lived in the property and remained in the family home.

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By wdr
08th Apr 2009 12:45

You are entitled to the relief prospectively on a factual basis
The '2 year' election window in TCGA s222(5) is only one of two ways of determining which of two homes is a 'main residence'.

The other is based , since the introduction of self assessment , on a claim in an SA return-the old Inspector's decision subject to appeal has gone. What has happened here is that as a question of fact you occupied the 2nd property as your main home.
If that was what you effectively claimed by submitting your SA return, then the Inspector has to show that you were wrong as a question of fact.

The problem you have may be in s222(6)which says that in the case of an individual living with a spouse there can be only one main residence for both. But on the facts at the time you were not living with your spouse. Oddly this subsection does not give any requirement for legal separation.

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