Massive capital gains tax - private residence relief case

jimmo

What I think you should be doing is both to look at actual residence and job related accommodation.

Let’s face it. If HMRC are not even aware that job related accommodation is an issue they will have more questions when that becomes clear to them.

Ultimately, you will need to compile a list, something along the lines of:

Starting Date, Ending Date, Address occupied, Reason or purpose of occupation.

Under that final heading you will need to give details like.

Actual occupation of trust property.

Living in job related accommodation provided by XXX (name of employer).

Living in rented accommodation elsewhere.

In that way you will be giving HMRC a much fuller history than they appear to have at the moment and that should enable things to start to progress.

I would then prepare a separate list along the lines of:

Starting Date, Ending Date, Period of (actual or deemed) Occupation, Period of Absence.

Traditionally those periods are expressed in terms of months but if you are using a spreadsheet it is much easier to use days (more on that if it you need it).

It will, of course, be open to HMRC to require evidence that job related accommodation was actually occupied. I would think that a letter from each employer confirming the dates and that it was job related accommodation would be ideal if you can get that.

Turning now to the question of professional help I think the big problem with Capital Gains Tax is that it really is a specialist subject. Certainly all Inspectors of Taxes and, I believe, Chartered Accountants, will have undergone formal training and passed exams but Capital Gains is a very small element of that and it is perfectly feasible for people to enjoy a successful career without ever touching the subject again. Professional skill is, I think, therefore patchy.

I don’t think I have ever had professional dealings with PWC but, whilst I won’t name them, I once had a phone conversation with someone who claimed to be the Capital Gains Partner of one of the really big firms and ended up asking him if he had any idea what Capital Gains is all about.

As it happens, the best opponent I ever came across was a solicitor, not an accountant. Why a solicitor should know so much about Capital Gains Tax, I really don’t know.

However this brings up the existence of your trust. Who, if anybody has the power to sack the accountant who is acting for the trust?

Obviously I am biased but, if your family has the legal power to do so, I would suggest that a face to face meeting with the HMRC Enquiry Officer handling the case could well be the best solution.

If the HMRC Enquiry Officer is a “Jobsworth” you should quickly come to realise that in the meeting. If not, you could do a lot worse than trusting HMRC.