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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Private residence relief: only or main residence: meaning of residence: judicial interpretation

The scheme of private residence relief was summarised by Brightman J in Sansom v Peay (52TC1) as,

“To exempt from liability to Capital Gains Tax the proceeds of sale of a person’s home.”

Here Brightman J uses the word ‘home’ in substitution for the word ‘residence’.

And in Frost v Feltham (55TC10), where the Court was asked to decide which of an individual’s residences was his main residence, Nourse J stated,

A residence is a place where somebody lives.”

These quotations clearly emphasise the point that the test of residence is one of quality rather then quantity: the dwelling house must have become the owner’s home. There is no minimum period of occupation that would enable an individual to establish a residence. This was confirmed by Millet J in Moore v Thompson (61TC15) where he stated,

“It is clear that the Commissioners were alive to the fact that even occasional and short residence in a place can make that a residence; but the question was one of fact and degree for the Commissioners.”

Every case must be decided upon its own particular facts.