Rules Governing Nomination of Prime Residencer

josswallace

If we take the case of a person who owns a flat in London and then decides to buy a second property in the country, my understanding is that the individual can choose which property to nominate as his main residence. In some circumstances the person may want to keep the flat as work/social access to London etc. but in fact the new house would be "where he lived", alternatively the new house in the country could be used as an occasional weekend/holiday home.

Am I right in assuming that having purchased the second property, registered for council tax etc. it is the individual’s right to notify HMRC which of the two properties he wants to register as his "main residence for CGT purposes" and that decision can be based on what suits the individual for CGT purposes rather than the use the residence is put to.

Specifically can HMRC at the time of declaration of nomination of main residence refuse to accept the nomination and if so on what grounds. Also can HMRC at some future date, say, 18 months later, query this election and require proof of what type of occupation was the residence used for.

 

mrschaucer

According to this, there is a two year window, and you do need to live in the nominated house as your main residence at some stage.  https://www.gov.uk/tax-sell-home/nominating-a-home#:~:text=You can nominate one property,your combination of homes changes.
Edit:  And it appears that HMRC cannot argue about which house you nominate - see the case of Ellis v HMRC here https://tax.bloomsburyprofessional.com/blog/cgt-main-residence-election-some-points-to-note-about-the-election

theartfullodger

Assuming neither property is being rented out....