Definition of primary/secondary residence for CGT

[terminal7]

I fully understand that if you owned 2 residences for the purposes of capital gains the home you spend the majority of your time would normally be deemed to be your primary residence and the other your secondary residence. Hence would not be liable to CGT on your primary residence but would be for your secondary residence.

Are these definitions changed if the place you resided for the majority of your time is a rented property?

T7

[RedSnapper]

There's a pretty clear guide here https://www.gov.uk/tax-relief-selling-home

[terminal7]

Not sure how clear is:

You must have lived in your home as your only or main residence at some point while you owned it.

That sounds pretty vague to me.

So if you go for an unspecified period to live in what was your secondary residence and then return to your rented accommodation - you will not be liable on selling the in effect secondary home. This reminds me of the 'flipping' that MPs got away with both in terms of CGT and expenses.

T7

[RedSnapper]

Not sure how clear is:

You must have lived in your home as your only or main residence at some point while you owned it.

That sounds pretty vague to me.

So if you go for an unspecified period to live in what was your secondary residence and then return to your rented accommodation - you will not be liable on selling the in effect secondary home. This reminds me of the 'flipping' that MPs got away with both in terms of CGT and expenses.

T7

If you take that one sentence in isolation, no it isn't clear. If you run through the full guide that the linked page leads to then it becomes pretty clear.

[terminal7]

Sorry fools, but this fool still fails to understand. The site that you kindly referred to seems to cover when you own 2 or more properties. I am citing the instance when you rent one property - hence have no possibility of capital gain (or indeed loss) - whilst own another property that may or may not be treated as a primary or secondary residence for the purposes of CGT.

[RedSnapper]

Sorry fools, but this fool still fails to understand. The site that you kindly referred to seems to cover when you own 2 or more properties. I am citing the instance when you rent one property - hence have no possibility of capital gain (or indeed loss) - whilst own another property that may or may not be treated as a primary or secondary residence for the purposes of CGT.

On the page linked to above click on the green Start Now button. It'll take you through the process of establishing what cgt liability there might be, if any. It covers the scenario of owning just one home as well as multiple homes.

[PinkDalek]

Never sure why these questions are asked at Legal rather than Taxes but ...

I fully understand that if you owned 2 residences for the purposes of capital gains the home you spend the majority of your time would normally be deemed to be your primary residence and the other your secondary residence. Hence would not be liable to CGT on your primary residence but would be for your secondary residence.

Are these definitions changed if the place you resided for the majority of your time is a rented property?

T7

Unless the taxpayer has no legal or equitable interest in the rented property, then the rented property would appear to be the Main Residence (all other things being equal) :

Private residence relief: only or main residence: an interest in a dwelling house is a requirement

An individual must have an interest in a dwelling house used as his residence for it to be a residence within the meaning of TCGA92/S222. This is because relief is available on the disposal of, or of an interest in a dwelling house or part of a dwelling house. References to a residence in Section 222 should be interpreted on this basis. Therefore, when considering which of an individual’s residences is their main residence for the purpose of private residence relief, it is only necessary to consider those in which that individual has an interest.

An interest in a dwelling house means a legal or equitable interest. It includes all possible forms of ownership from owning the freehold to being the co-owner of a minimal tenancy. In most cases, where a residence is rented a tenancy exists, and such residences therefore remain within Section 222.

The only circumstance in which an individual can reside in a dwelling house in which he or she has no legal or equitable interest is where the property is occupied under licence ...

https://www.gov.uk/hmrc-internal-manual ... al/cg64470