CG64427 - Only or main residence: meaning of residence: introduction

The word residence is used throughout TCGA92/S222 to TCGA92/S226 but is not defined in the legislation. So the word should be given its ordinary meaning. For an individual this is the dwelling in which that person habitually lives: in other words his or her home.

In some circumstances the legislation deems a dwelling house which is not in fact occupied as a home to be a person's residence. These circumstances are summarised at CG64477.

In all other circumstances a dwelling house must be occupied by the individual as a residence before relief can be available. An intention to occupy is not sufficient, see CG64465.

Judicial interpretation of residence

The scheme of private residence relief was explained by Brightman J, in Sansom v Peay (52TC1) as

‘To exempt from liability to Capital Gains Tax the proceeds of sale of a persons home'.

The word ‘home' is clearly being used as a substitute for the word ‘residence'.

The test of residence is one of quality rather than quantity of occupation. A dwelling house must have become its owners home. So no minimum qualifying period of occupation can be relied upon to constitute residence. This point was expressed by Millett J in Moore v Thompson (61TC15) in the following terms.

‘It is clear that the Commissioners were alive to the fact that even occasional and short residence in a place can make that a residence; but the question was one of fact and degree for the Commissioners'.

Every case must be decided on its own facts.

The identification of a residence is important in other areas of statute. For example, mortgage interest relief is available on a loan used to acquire a person's only or main residence. In the case of Frost v Feltham (55TC10) the Court was asked to consider which of two residences was an individual's main residence. Nourse J commented that

‘A residence is a place where somebody lives'.