CG64550 - Two or more residences: criteria for determination

Although the individual giving the notice does not have to nominate the residence which is factually the main residence your determination must be in favour of the main residence.

The main residence in practice need not be the residence at which the individual spends most of his or her time, although it commonly will be. A useful review of the criteria to be applied is contained in the High Court decision in Frost v Feltham (55TC10), a mortgage interest relief case. The comment of Nourse J. that

‘If someone lives in two houses the question, which does he use as the principal or more important one, cannot be determined solely by reference to the way in which he divides his time between the two’

makes the point clearly.

The following list of criteria, although not exhaustive, may be useful.

• What address is shown on declarations made on return forms.
• What address is shown on third party correspondence in the file such as dividend warrant counterfoils.
• If a mortgage has been used to acquire one or more residences, on which mortgage is mortgage interest relief due.
• What security of tenure did the individual have in respect of each residence.
• How is each residence furnished.
• If the individual is married or is in a civil partnership where does the family spend its time.
• At which residence is the individual registered to vote.
• Where is the individual's place of work.

If agreement could not be reached and the year of disposal was not one to which Self Assessment applies, the Inspector would send a formal notice of determination to the taxpayer with a covering letter (and copies to the agent, if any) on the following lines:-

‘Capital Gains Tax: notice of determination of place of main residence

Where a taxpayer has two (or more) residences for any period, subsection (5)(a) of TCGA92/S222 gives him or her the right to decide which is to be treated as his or her main residence, provided that they give notice in writing to the Inspector within two years (*) of the beginning of that period. In default of such notice, the Inspector may determine which of the houses is the taxpayer's main residence.

As I have not received such notice from you, I hereby determine your main residence to be

for the period

If you do not accept this decision, written notice of appeal should be given to me within thirty days of the receipt of this notice. Arrangements will then be made for your appeal to be heard by the General Commissioners or, if you so elect, by the Special Commissioners who are independent bodies.

Inspector's Signature

…………………………………………………………….(Date)’

(*) Or longer period allowed by concession, see CG64500-64503.