Wife Entitled to Maintenance Until Sale of Family Home
When divorcing couples disagree on how assets should be divided, the courts will seek to arrive at a fair outcome for both parties. In deciding how the proceeds of sale...
Continue readingWhen a couple inherited a house from the deceased parent of one of them, they decided that they did not wish to retain it in the long term and subsequently put it on the market. The week before the property was sold, they sent an election to HM Revenue and Customs (HMRC) to have it treated as their principal private residence.
The effect of the election, if successful, would have been to eliminate the charge to Capital Gains Tax on the difference between the net sale proceeds of the house and its value when it was inherited.
However, HMRC rejected the election. The prime reason for doing so was that the couple had not assembled reasonable evidence to substantiate their claim that the property had been their residence.
It was established that, as a matter of fact, they had never moved into the property. Nor could they demonstrate any periods of residence in the house, which was only six miles away from their own home.
The moral of the story is that where a principal private residence election is to be made, evidence should be assembled to support it and establish that there is a factual basis (demonstrated occupation as a residence) for the claim.