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HMRC internal manual

Capital Gains Manual

Private residence relief: two or more residences: no valid notice made

Where an individual has two or more residences within the meaning of Section 222 it is not mandatory for that individual to make a notice nominating which is to be treated as the only or main residence.

However where a notice is not made, or an invalid notice is made, the residence which attracts relief is the dwelling house which is the main residence as a matter of fact.

All of the facts and circumstances of the particular case must be considered in order to conclude which the residence is the main residence.

In practice the main residence is not necessarily the residence where the individual spends the majority of their time, although it commonly will be. This question was considered in the case of Frost v Feltham (55TC10) and the High Court decision in this case sets out a useful summary of the criteria to be applied. Nourse J comments in the decision,

“If someone lives in two houses the question, which does he use as the principal or more important one, cannot be determined solely by reference to the way in which he divides his time between the two.”

The following list of points to consider, although not exhaustive, may be useful in establishing which is the main residence,

  • If the individual is married or in a civil partnership, where does the family spend its time?
  • If the individual has children, where do they go to school?
  • At which residence is the individual registered to vote?
  • Where is the individual’s place of work?
  • How is each residence furnished?
  • Which address is used for correspondence?

    • Banks & Building Societies
    • Credit cards
    • HMRC
  • Where is the individual registered with a doctor / dentist?
  • At which address is the individual’s car registered and insured?
  • Which address is the main residence for council tax?