Introduction
Principal residence relief (PRR) is an important part of capital gains tax (CGT) rules in the United Kingdom. It removes taxes on gains from selling a home treated as a person’s main home. Applying this relief can be complicated, requiring detailed knowledge of the law and related cases. The First-tier Tribunal’s decision in Moore (Piers) v HMRC [2013] UKFTT 433 (TC) explained how “residence” is defined under section 222 of the Taxation of Chargeable Gains Act 1992 (TCGA 1992). This case shows how factors like frequency, length, and way of property use help determine if it qualifies for PRR. The ruling confirms that a close review of facts is necessary to prove a property’s status as a main home.
The Facts of Moore v HMRC
The case involved Mr. Moore, who claimed PRR on gains from selling a property. HMRC refused his claim, stating the property was not his main home. Mr. Moore owned several properties and stayed at each for different periods. The disputed property was a flat above a business he owned. He argued that even though he stayed there sometimes and for short periods, it was his main residence. The tribunal had to decide if his limited stays met the PRR requirements.
The Tribunal’s Review of “Residence”
The tribunal carefully examined the meaning of “residence” under section 222 TCGA 1992. It agreed that living there continuously or exclusively is not required. However, it found that how the property is used matters. The tribunal looked at how often and how long Mr. Moore stayed there, his reasons for staying, and which parts of the flat he used. It assessed whether the property functioned as a real home rather than a temporary space.
The Role of Plans and Ownership Period
The tribunal also discussed whether a person’s intentions for the property affect PRR. While intentions can be considered, they are not the main factor. Actual use is more important. Further, owning a property for a long time does not automatically grant PRR. The property must be actively used as a home, regardless of ownership length.
Applying the Tests to Mr. Moore’s Case
Using these principles, the tribunal ruled Mr. Moore’s property did not qualify for PRR. His irregular, short stays and minimal use of the flat’s features showed it was not his main home. The tribunal concluded his use did not meet the required consistency under the law.
Comparison with Earlier Cases: Goodwin v Curtis
The Moore decision aligns with past rulings like Goodwin v Curtis [1998] STC 475. In Goodwin, a property briefly occupied before sale was denied PRR. Both cases stress that actual occupation, not just intentions or short stays, must be proven. They confirm that PRR is not guaranteed and depends on how the property is lived in. The way a home is used remains the central factor.
Practical Guidance from Moore v HMRC
Moore v HMRC offers clear guidance for taxpayers and professionals on PRR claims. It shows the need to keep records of property use, including dates and lengths of stays, to support a claim. The case confirms that frequency, length, and way of property use determine residence status. Those with multiple properties should check their usage patterns to confirm PRR eligibility. This ruling shows that specific factual evidence is necessary, and intentions alone are not enough.
Conclusion
The Moore v HMRC decision explains the test for principal residence relief in capital gains tax. The tribunal’s focus on frequency, length, and way of property use supports the need for close factual review. This case, alongside earlier rulings like Goodwin v Curtis, helps clarify how PRR rules apply. The judgment confirms that residence for PRR depends on actual use of the property as a home, not just ownership or intentions. This approach to section 222 TCGA 1992 highlights the importance of examining individual circumstances and specific property use patterns.
