Home is where the wine is
In a recent tax case, a couple successfully appealed against a £3.3 million capital gains tax (CGT) assessment following the sale of their extensively renovated Chelsea property. The central issue revolved around whether the property qualified for Private Residence Relief (PRR), which exempts gains from CGT when selling your main home main home.
HMRC argued that the couple had not lived in the property as their primary residence, which if they had been successful would have meant they it would not have qualified for the generous PRR. However, the First-tier Tribunal found in favor of the taxpayers, noting several factors that evidenced genuine occupation. Notably, the existence of a wine cellar was considered indicative of personal use and enjoyment of the property, supporting the claim of it being their main residence. The owners had also hosted social events at the property which added weight to their argument.
This case highlights the importance of tangible indicators of personal occupation when claiming PRR. It’s been a loooong time since merely paying the utility bills would be seen as occupation of a property as some once suggested.