Commentary

C3.1709A Determining the period of ownership for the principal private residence exemption

Capital gains tax
Capital gains tax | Commentary

C3.1709A Determining the period of ownership for the principal private residence exemption

Capital gains tax | Commentary

C3.1709A Determining the period of ownership for the principal private residence exemption

The period of ownership generally begins on the date the dwelling house was first acquired, or on 31 March 1982 if that is later. It ends when the property is disposed1. It would appear that the period of ownership begins and ends on the dates of the unconditional contracts to buy and sell the property respectively2.

The period between exchange of contracts and completion

There is normally a lapse of a few weeks between exchange of contracts and completion, during which the purchaser has no right to occupy the property. It is difficult to see how the property can be the purchaser's only or main residence during that intervening period.

The Higgins3 case demonstrates the complexity of the issues. The taxpayer entered into a contract in October 2006 for the purchase of a flat yet to be built but he did not have any right to occupy it until January 2010 when he completed the purchase, and the flat did not exist for most of that period. Mr Higgins occupied the apartment from January 2010 to January 2012, when he completed its sale.

The issue was the 'period of ownership' for the purpose of main residence relief. Mr Higgins contended that main residence relief applied to the whole capital gain, as he had occupied the apartment from its physical completion until its sale. HMRC considered that relief should only be granted in respect of a proportion of the gain because the

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