My client's only residential property is a London Flat which he shares with a lodger. During the week he works on the South Coast where he rents living accommodation. Traditionally he returned to his flat every weekend, which we believe was sufficient shared occupancy to claim rent a room relief. Are we correct and does this situation change whilst he is no longer able to return to London for weekends because of Covid regulations?
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I would just carry on regardless
State is conjuring up rules that need to be complied with
Tax system just cannot keep up
I think that's an excellent question. Paul's answer is probably better than he realised. You see, the statutory test (s786(1)(c) ITTOIA 2005) is simply that "for some or all of that period the residence is the individual's only or main residence" ("that period" being the one mentioned in (1)(b) and defined later in the section). So there's no problem at all that I can see from having a few weeks in enforced lockdown in another property. (And maybe, far from being unable to keep up, the tax rules are ahead of the game here, if only accountants could be bothered to read them. Paul. Rather than making up their own. Paul.)
So let's come onto that statutory test. Is it fulfilled by weekend visits alone? That's a matter of fact but I thought that it had been found that, normally, a bit more than that was needed (I had in my head that there was a case, but all I'm finding is CG64500). Incidentally, whereas for CGT you can settle the question by nomination (as discussed in that extract, in fact), for rent a room it has to be on the facts - there is no nomination, no deeming.
I love the following quote in Croner's description of the case:
"Lord Campbell tells how Lord Eldon was often prevented by the burdens of his office from visiting his estate at Encombe in Dorset for long periods at a time.
Sometimes he was only able to get down there for three weeks or so in the year, for the partridge shooting in September. True it was that Lord Eldon also had a good house in Hamilton Place, but it could not really have been suggested that he did not use Encombe as his principal or more important residence."
So 'main residence' has become 'principal or more important residence' which takes us back to deeming doesn't it?
Needed to read it
A case about mortgage relief
His work as a self employed publican had a lease agreement requiring him to reside in the pub
So really the equivalent of job related accommodation.
Quite relevant
Not really certain that the rented London accommodation would be looked on as being a similar circumstance
...which takes us back to deeming doesn't it?
Their Lordships would be appalled at your allegation. It is merely a matter of fact that three weeks of shooting partridges in the country outweighs 49 weeks of burdensome London living, in terms of importance*. But probably, were one to look deeply into the reasoning, only so in the particular case of Lord Eldon.
(I'm obviously being flippant. The 'risk' is that a casual observer might conclude, as the author of the CG page I referred to above hinted, that your main residence was the one where you spent most of your time. The cases show that that is too simplistic. Other factors may weigh more heavily.)
Deeming means (for example) treating something that is not as if it is. Like the nomination - you can opt for your secondary residence to be treated as your only or main residence, when it is in fact not so.
*For CGT, you might now have to meet the 90 day test - partridges or no partridges. When they brought in NRCGT, they made other changes that potentially impact in situations like this. That's a discussion for a CGT thread though. Like the ones that softwareseeker recently started.
I too was being flippant ... enjoying the insight to social mores of not that long ago (rather than assisting the OP), a bit like when the presiding judge asked the jury in 1960 whether Lady Chatterley's Lover was “a book that you would even wish your wife or your servants to read”!
But my point regarding the slide into deeming territory was the move from 'main residence' (which is a matter of fact only dependent on the criteria used) to 'principal or more important residence' (which seems to me to be a matter of subjective opinion).
Nevertheless I take your point that, as so often under British law, the same phrase can have different meanings within specific sets of statutes/regs - so you always need to check that your reference is directly relevant to the case in hand.
So really the thing to consider is whether he owns his PPR
It could be argued that Rented accommodation is in fact the PPR, because that is where he spends most of his time.
Could be best to make an election, provided that it is in time. That depends whether the rented accommodation has been the same property throughout.
If not viable to elect as too late then change rented property and start all over electing from date new property made available
I would agree that, if there is a rented residence on the south coast, then making the election for CGT would be wise. It's only for CGT though, it wouldn't change the position for RaR.
The CG page I referred to above was about late elections when you hadn't realised your rented accommodation could be a residence. However your point about moving around is interesting - if the client has been of no fixed abode whilst working away, so no place has become a residence, then his only residence remains the London property and RaR relief is not in doubt (at least not in my mind).