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Private Residence Exemption - forced to leave

Private Residence Exemption - forced to leave due to domestic abuse

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My client and her partner (unmarried) bought a property together in early 2019 as their private residence.

This was and remains the only property that my client owns or has an interest in.

Later on 2019 due to domestic abuse, my client was forced to leave the property, her home, and has since been living with her parents.

The property is now being sold and a substantial gain will be made.

I have reviewed the legislation but cannot see if there is anything to exempt my client from her share of the gain relating to the period between actual occupation and the final 9 months.  It certainly seems inequitable that she should be taxed on any part of the gain in the circumstances.  S223 (3)(a) TCGA 1992 allows for any period of absence up to 3 years to qualify for relief but is my client not precluded from claiming this due to not returning to the property. 

Am I missing something?

Many thanks for any feedback.

Replies (12)

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By SXGuy
26th May 2022 11:27

Either you have failed to mention something, or I'm missing something. But what tax would your client pay, for selling his/her main and only residence?

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Replying to SXGuy:
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By Hometing
26th May 2022 12:13

Not been occupied as main residence since 2019 so non-PPR qualifying periods exist.

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By Justin Bryant
26th May 2022 12:18

I recall similar questions re prisoners and the like and do not think there's an obvious solution (very happy to be proved wrong of course).

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Replying to Justin Bryant:
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By Tax Dragon
26th May 2022 12:28

Sadly I agree. Occupation is a requirement. That's even part of the heading to CG64465. And quite possibly s223(7B) makes this point even clearer than it was before FA2015.

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Replying to Tax Dragon:
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By The Dullard
26th May 2022 13:55

To expand on your point, the requirement is actually "occupation as a residence". "Occupation", of itself, is not the same thing as "living there". "Occupation as a residence" inevitably means "ordinarily living there" though, because of the meaning of residence to which CG64465 refers.

I think the OP's only line of argument would be that the client continued to "occupy" the house as their residence, but for reasons of self-preservation needed to do so from the safe vantage of their parents' house. It's an incredibly tenuous proposition.

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By AndyC555
26th May 2022 12:45

Perhaps another example of tax where 'fairness' won't apply.

For you see, the 'spirit of the law' only applies if it results in you paying more tax than would otherwise be the case. If it might result in more tax, HMRC will be quick to point to the letter of the law.

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Replying to AndyC555:
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By Tax Dragon
26th May 2022 12:56

If you want 'fairness', you probably have to accept that OMRR should be scrapped. (And maybe it should be.)

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Replying to AndyC555:
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By Tax Dragon
26th May 2022 15:17

Also... would you consider it 'unfair' if the relationship had ended for other reasons, one of the owners had moved out (let's say they go back to their parents) and later had a tax liability on a hefty gain? Or what if it was the (let's say alleged) abuser that moved out? Should they get relief?

So... is it the tax system that is 'unfair' here, or is the 'unfairness' that the person in this case felt unable to live in the property she was entitled to live in? Surely any recourse in such cases is not a matter for tax law to provide, but (as Justin's link below hints at) it may be available elsewhere in law.

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By Justin Bryant
26th May 2022 13:13

See para 286 here re trespass potentially: https://www.bailii.org/ew/cases/EWHC/Ch/2022/1202.html

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By CHRISTINA GORHAM
31st May 2022 11:30

Would it be feasible for your client to get an occupation order against their abuser, kicking them out, so that they could return to the "family" house for the required period to entitle them to resident relief? If they are scared their partner will keep harassing them they can get a non-molestation order at the same time, forcing them to stay at least a certain distance from the house.

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Replying to CHRISTINA GORHAM:
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By Leywood
31st May 2022 11:34

My thoughts exactly. Problem being that abusers ignore and the police do nothing. Police force countrywide in the biggest mess they have ever been, getting them to even answer the phone is a miracle. Only time Ive seen one lately was when someone died on my road and then there were 10 of them who turned up. Yes, 10!!!(was a natural death, just reported as a possible 'incident').

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By ArianBloodwood
31st May 2022 14:01

To me there's an excellent argument that she still "occupies" the house as her PPR, especially if the majority of her belongings remain there and she remains equally liable with her ex- for the bills etc. In many situations like this it isn't possible to finally split shared belongings until everything is actually physically moved out of the house, so many of her remaining belongings may be co-owned with her ex-. There is a huge difference between taking refuge elsewhere on a contingent basis and actually moving house or shifting one's residence. Domestic abuse is only one reason why people may need to take refuge. War and natural disasters are other common reasons. Doesn't mean the occupation or residence of one's original home ceases.

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