In Gibson v HMRC (TC03021 – 11November 2013) Mr Gibson had purchased a derelict house with the intention of modernising it to occupy it as his main residence with his girlfriend. It had soon become apparent that he would not be able to afford both the mortgage on the house and the cost of updating it. Furthermore he had been advised by an architect that a cheaper solution would be to demolish the house and build a new one. Mr Gibson had therefore decided to obtain planning permission to erect a new building and then to sell the property. The disposal had triggered a taxable capital gain on which Mr Gibson had claimed principal private residence relief under TCGA 1992 s 222. HMRC had rejected the claim on the ground that the newly built house was not the taxpayer’s main residence. HMRC relied in particular on the...
