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principle private residence - proof

principle private residence - proof

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Mr X owns both a town home and a country home, both of which he has used continuously as his private residences, regularly going from one to the other.  He has never made a PPR election and is now out of time to do so.  For the purposes of the PPR exemption how does he prove which of the two was his principle private residence at any time?

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By Roland195
21st Feb 2011 12:33

Complicated

Can get very complicated but where he received his mail & where he was registered to vote is a good place to start.

 

 

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Euan's picture
By Euan MacLennan
21st Feb 2011 12:47

The first one

In the absence of an election, the home he occupied first as his residence will remain his principal residence.

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By michael stephens
21st Feb 2011 13:11

principle private residence - proof

Thanks for these quick replies.  The reply from Euan MacLennan surprises me.  I thought that if, as a matter of fact, the second home becomes your principle private residence for a period then it becomes entitled to the exemption.  Are you sure Euan? 

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Nichola Ross Martin
By Nichola Ross Martin
21st Feb 2011 13:17

There is no "principle or principal" in main residence relief

Your main residence is decided on the basis of the facts of the individual case. You self-assess, and then it is up to HMRC to object. What you need above all is evidence to establish the sufficient quality of occupation necessary for HMRC or the Tribunal to agree that a residence was your main one for any set period.

Where there are two main residences - so where one is not just your holiday home but an actual residence this is normally self-evident from time you spend there, what bills you pay and what you are doing there. The difficulty is that without the main residence election, the default will be more likely to be the home where the family is based, you vote and is your main postal address. So the onus will be on your to prove that the second residence was at some time the main one instead.

Virtual tax support for accountants and their clients: www.rossmartin.co.uk

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By michael stephens
21st Feb 2011 13:38

main residence evidence

Many thanks Nichola.  And sorry for the 'principle' gaffe!  To establish residency, would it be helpful then to collect letters, bills etc addressed to that address, as well as proof of being on the voting register?  Is there any minimum length of time you have to use a residence as your main residence before it qualifies?

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By spike418
21st Feb 2011 14:30

Private Residence Proof

During  an enquiry last year into a clients residence he was asked to produce driving licence, council tax bills, evidence of removal expenses etc. The HMRC also asked to see the gas and electric bills for the period of occupation and then queried the apparent low level of usage.

We won in the end though!

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By lisler
21st Feb 2011 21:36

First Tier Tribunal

 Follow this link to see how the First Tier Tribunal reached a decision following an appeal by a taxpayer: www.financeandtaxtribunals.gov.uk/Aspx/view.aspx. It shows the factors taken into consideration in order to decide if it was the taxpayers main residence and eligible for the CT exemption.

 

 

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By Richard Willis
22nd Feb 2011 08:51

It would be simpler

if he could get himself elected to Parliament!

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By kenfrost
22nd Feb 2011 10:44

The Mistress Question

The house in which Mr X keeps his mistress is the one which will be regarded as his second home:)

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By michael stephens
22nd Feb 2011 17:50

tribunal decisions

many thanks lisler - if you or anyone else can provide further references to tribunal decisions it would be much appreciated

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By The Naked Accountant
25th Feb 2011 09:52

rental property

If the tax at stake is large enough he could consider renting a third property for a short period as another residence.  This would then open another window to make a PPR election to take away the hassle of battling with HMRC over evidence. 

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