Comment from Mike Truman, Editor, LexisNexis Taxation
Jacqui Smith’s London home ‘probably not a residence at all for tax purposes’
The arrangements under which the Home Secretary, Jacqui Smith MP, stays with her sister during parliamentary sessions, would not probably not allow her to treat her constituency house as a second home for tax purposes, says a leading tax expert.
Mike Truman, editor of the LexisNexis magazine Taxation, says that 'For capital gains tax exemption, staying with family or friends cannot be treated as a second home. Unless there a formal lease with Ms Smith's sister, she is probably treated for tax as only having one residence - her constituency home.'
'Although the rules for MPs are not quite the same as the tax rules, they used similar wording for the period concerned. Even if she was treated as having two homes, the Revenue authorities would have considered issues such as the place where the family spent its time and whether the property was owned or rented in deciding which was the main residence.