In cases where a dispute arises regarding the ‘quality of occupation,’ it is essential to provide evidence to support the following criteria: a degree of permanence, a degree of continuity, or the expectation of continuity. Without meeting these requirements, a property may not be considered a ‘residence’ for the purposes of capital gains tax (CGT) private residence relief. Therefore, it is crucial to establish and demonstrate the lasting nature and expectations of occupancy in order to qualify for this relief.
Factors indicative of occupation as main residence:
Income not generated from property sales
Your income is entirely unrelated to the proceeds received on the disposal of properties
Property used as an address for correspondence
You use this address as the registered address in connection with HMRC, driving licence, utility bills and banks
No Council tax discount
You are not receiving a ‘second home’ or ‘empty home’ discount from council tax in respect of the property
Family live with you at the property
Where applicable, your family reside with you at the property rather than at another property of yours.
Utility services
All of the utility services are connected and the usage of these services – evidenced by your bills – shows that the property is being used as a residence.
Marketing of the property
The property was occupied as a main residence before it was put on the market with estate agents.
Factors indicative not occupied as main residence
Income from property sales
Where one receives the majority of their income from selling properties then this might point towards the fact that the property was not occupied as a main residence.
Postal address
If you use an alternative property as the registered address in connection with HMRC, driving licence, utility bills and banks then this is likely to be indicative that it is not your main residence.
Council tax discount has been claimed
A Tribunal is likely to be persuaded that the property was not occupied as a main residence by HMRC if one has applied for an ‘empty home’ discount.
Family
Of course, families can be quite complex these days. However, in the absence of other reasons, if all of the rest of your family live in another property throughout the week and you are claiming to live in a different property then this might point to the fact that the other property is really your residence.
Utility services
Where either the mains are not fully connected or their usage is minimal then this is likely to point towards the conclusion that this is not occupied as a main residence.
Marketing of the property
Where a property is put on the market before moving in to the property or before an intention to live in as the residence then this may be indicative of the property not being a residence.