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Markel Tax

14 May 2020

2 properties - will I get full tax relief as it’s a permanent place of residence?

My client owns a house in the country as her main residence and rents a flat in London where she stays during the week. If she sells her main residence, I assume that she will get full relief as it’s her permanent place of residence?

While that’s a logical conclusion it’s not strictly the case. The legislation provides under s 222(5) that where an individual has two or more residences available to them, an election needs to be made within two years of the combination of residences first becoming available. The good news is that ESC D21 applies to extend the period and this will be enacted into TCGA 1992, s 222(5A). The ESC (or s222(5A) from 6 April 2020) allows for a late nomination, provided that the individual has not made a nomination previously and all but one of their residences has a negligible capital value (e.g. a short-term let flat). The provisions extend the time limit until a reasonable time after the person is first made aware that a nomination is needed. So what is reasonable? According to HMRC:

In practice an individual will not normally be aware of the need for a nomination until a residence is sold and a computation of the gain accruing is submitted. So the time limit for making a nomination should be extended for a reasonable period after the computation has been submitted and you have explained the need for a nomination.

This late rule does not apply if the individual has two or more residences with capital value but the introduction of a rental property could give another opportunity to make an election where the deadline has passed.

For further information and support with these or any other issues, please contact the Tax Desk on 0845 4900 509 and ask for Martin Mann or email

Tagged HMRC Property Property tax & SDLT