Private residence relief (PRR) provides relief from capital gains tax (CGT) on the disposal of a property that has been used as your main home during the period of  ownership. In the recent First Tier Tribunal (FTT) case of Hashmi v HMRC, the tribunal found that Mrs Hashmi (the taxpayer) had failed to satisfy the burden of proof required to show that the properties that she lived in were her private residences, and therefore eligible for private residence relief. The case provides insight into the level of proof that is required to support a claim for private residence relief for a property. Background Between 2013 and 2015, the taxpayer lived in the following properties, for the following periods:  132 Shaggy Calf Lane unt...

In line with government guidelines, large swathes of UK workers are currently working from home.  Whilst there are a range of expenses you may be able to claim depending on your specific circumstances, this blog is aimed at those of you who own a limited company and are running the business from home. Rather than claiming the flat rate of £6 per week (£26 per month) under the simplified expenses rules, it may be more beneficial to instead rent out the personal work space in your home to your limited company. Under this arrangement, where the rent charged is equal to costs (see below), then no taxable rental profits will arise. Furthermore, provided that the rent is charged at no more than the market rate then the rental payments ma...

As of 6 April 2020, disposals of residential property and the Capital Gains Tax (“CGT”) charged must be reported and paid within 30 days of the completion date. This will be completed through the new CGT on UK property service, which will be accessible through www.gov.uk from today. The new rules apply to individuals, personal representatives and trustees (i.e. not companies). Prior to 6 April 2020, if a taxable gain arose when a UK resident disposed of an interest in UK residential property, this had to be reported through a Self-Assessment tax return. This meant that the disposal and Capital Gains Tax (“CGT”) had to be reported and paid by 31 January following the tax year in which the disposal took place. Under the new ru...

Private residence relief (“PRR”) was first introduced over 50 years ago and is one of the more widely known tax reliefs, providing relief from capital gains tax ("CGT") on the sale of your home. That said, there has been contention over the definition of the terms “period of ownership” and “periods of occupation”, both of which are crucial for determining if PRR can be applied. Last year we wrote a blog on the case of Higgins v HMRC where the Upper Tribunal held that the period of ownership for PRR purposes starts from the date the contract for purchase was signed, even though the property in question had not yet been built. Mr Higgins has appealed his case to the Court of Appeal who has now reversed the Upper Tribunal�...