Private residence relief elections


Andy Wood

Andy is a practical, creative tax adviser who assists a variety of clients in achieving their personal and commercial objectives in the most tax efficient manner.

Private residence relief elections

Introduction – private residence relief elections

As discussed in other articles in the Private Residence Relief Signpost, the relief is available on the main residence.

This is clearly quite straightforward where an individual owns a single property.

However, what is the position where the taxpayer owns more than one property and more than one is occupied as a residence?

Private residence relief elections under TCGA 1992, s222

Where one is in this situation it is good advice to ensure that you elect under TCGA 1992, s222a property as your main residence.

Where such an election is made then this draws a line under the issue. The property subject to the election is your main residence and, once a claim is accepted by HMRC, they cannot challenge the claim. The one realistic exception to this would be if HMRC detective work determined that the property had never been occupied as a residence at all. For example a property purchased ‘in a state of disrepair such that the property is not fit for human habitation” was argued not to be a residence by HMRC (Lindsay Meikle v HMRC [2014])

An election must be made within 2 years of the second property being held as a residence.

If one does not make the election then as to which property will be treated as your main residence will be decided ‘on the facts’.

This is all set out in TCGA 1992, s222(5).

Private residence relief elections – varying the election

An election made under TCGA 1992, s222may be varied later by giving notice within 2 years of any change. For example, when a new property has been purchased. This is open to potential planning opportunities where one has a number of properties and one can take advantage of periods of deemed occupation – such as relief for the final 18 months of ownership.

It is worth noting that one does not have to choose between the existing main residence and the new property when you purchase a new property.

For example, if one has four properties and you acquire a fifth then a new 2 year window opens on the purchase of the fifth. One could choose any of the five properties in this 2-year window.

Private residence relief elections – case law


There are 4 relevant cases:

  • Michael J Harte and Brenda A Harte v HMRC [2012] TC 1951
  • Mrs P A Ellis v HMRC [2013] TC02426
  • William P Harrison v HMRC [2015] TC04693
  • John McFarlane v HMRC [2018] TC06512


A couple (The Harte’s) inherited a property that was 6 miles from their own house. They stayed at the property from time to time. The longest continuous period being 3 weeks.

The couple did not put the bills in to their own name and did not move any of their own furniture in their (the property still had the deceased relative’s property in it).

The couple had two similar properties 6 miles apart but had not decided which one to sell. About 3 months after the relative had died, a neighbour offered to buy the inherited property and it was sold. Sometime afterwards, the couple submitted an election under TCGA 1992, s222.

It was held that the Harte’s occupation did not have the ‘quality’ to make it a residence for the purposes of TCGA 1992, s222.


In this case, an election had been made on a property under TCGA 1992, s222. This property was then sold. In this case, HMRc accepted that the property was a residencebut that it was not their main residence.

HMRC argued that whether a residence was or was not a person’s main residence was a matter of fact and degree when comparing the various residences used by any given person against each other.

However, the Tribunal pointed out that once HMRC had conceded that the property was a residence and it was accepted or admitted that the taxpayers had two residences, the effect of TCGA 1992, s222(5) was to allow the taxpayers to make an election as to which of the two residences was, for CGT purposes, their main residence.

In other words, HMRC can challenge the assertion made by a taxpayer that a particular property is a residence used or occupied by him, but once it is proved or accepted that a particular property is a residence, they cannot argue that as a matter of fact and degree that residence is not the taxpayer’s mainresidence if an election has been made.

As such, the taxpayer was successful.


Mr Harrison owned a farmhouse. He considered this to be his main residence and he occupied it all year round.

Between 2001 and 2009 he made 12 main residence elections under TCGA 1992, s222  in respect of other properties he owned. Some of these elections lasted for a period of 2-3 months.

Over two tax years (2009/10-2010/11) he sold six of these and claimed private residence relief in respect of each.

It was clear that Mr Harrison considered that none of these properties were his main residence. Instead, he thought of them as second properties.

HMRC took the position that none of these other properties were occupied with any degree of permanence or continuity and there was no expectation of this.

Unsurprisingly, the FTT agreed with HMRC and held that the farmhouse was, for all relevant times, his only or main residence.

Two properties but no election made

As stated above, where one has two properties and you have not made an election under TCGA 1992, s222treat the issued will be decided on the facts.

As such, evidence will be crucial as the burden of proof will lay with the taxpayer.


If you have any queries on private residence relief elections or private residence relief generally then please get in touch





Private residence relief elections was last updated on 16 September 2018

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