CG64510 - Two or more residences: variation of notice

A notice given under TCGA92/S222(5) can be varied by a further notice which can be given at any time. But such a further notice is only effective for a period beginning not earlier than 2 years before it is given.

A variation will often be made when the disposal of a residence is in prospect or has already taken place. The intention is to secure the final period exemption, see CG64985+, on the residence to be sold at the cost of a minimal loss of relief on the residence retained. This is illustrated by the example below.

A person has had two residences for many years, residences X and Y. He has submitted a valid notice nominating X as his main residence. On 1 January 1992 he disposes of Y and realises a large gain.

In order to obtain some relief in respect of that gain, on 1 February 1992 he submits a variation to his original notice which nominates Y as his main residence from 1 February 1990. On 8 February 1992 he submits a further variation which nominates X as his main residence from 8 February 1990.

So Y has been validly nominated as his main residence for one week in February 1990. As Y has been his main residence for this period he is entitled to the final period exemption, see CG64985+. For a disposal in 1992 this was 36 months. The result is that at the expense of a loss of one weeks relief on X he secures three years relief on Y.