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Main Residence for Private Residence Relief

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If you have moved between two properties you owned as your main residence, or lived in a property before letting it, then you may need to demonstrate to HMRC that you did actually live there in order to prove a claim that the property was your main residence for private residence relief in order to obtain a reduction in your capital gains tax liability. To be able to do so may save you a significant amount in tax.

We are often asked how long you need to have lived in the property and what kind of evidence you ought to produce to substantiate a claim. The first question isn’t easy to answer definitively and a recent tribunal case got no closer than saying, ‘some evidence of permanence, some degree of continuity or expectation of continuity’. It’s not easy to be sure what time scale is necessary (though we think anything under six months is unlikely to be convincing) but clearly a body of evidence needs to be gathered in order to prove somewhere is your main residence for private residence relief purposes.

Helpfully, the tribunal made some suggestions of the kind of documentary evidence that should have been produced in the case involved. They included:

  • letters received when living there
  • photos of yourself at the property
  • witness statements from family and friends
  • utility bills
  • TV licence
  • car registered at the address
  • council tax paid in your name
  • refurbishment invoices made to the address
  • insurance documents

So if you think you might need to make a case that a property was your main residence for private residence relief then keep as many of these documents as possible. If you are making a claim for a property that you lived in some time ago then it’s time to search for as much evidence as possible as it could save you a considerable amount of tax.

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