15:56 PM, 29th January 2017, About 5 years ago 15
HMRC have recently lost yet another important legal battle, this time over CGT due on a property refurb deal.
Mr & Mrs Munford purchased the property in Halsey Street, London SW3 for million in 2004 for £1,050,000. From 19th to 26th December 2005 they elected the property as their main home between and sold it after refurbishing it in March 2006 for £2,550,000.
Despite making £730,000 on a refurb deal the couple hadn’t paid a penny of tax as a result of claiming the property had been their principal private residence.
HMRC’s argument was that only one week in residence was not enough to claim the property was indeed the couples home, hence the PPR relief claimed should not apply and that £190,000 of capital gains tax was due.
However, a tax tribunal failed to support HMRC and dismissed its case, pointing to a passage from the HMRC Capital Gains Manual CG64510 which clearly explains how private residence relief can be maximised by varying notices given under section 222(5) Taxation of Chargeable Gains Act 1992.
To read the full ruling CLICK HERE
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