In Sabbir Patwary v HMRC [2024] TC09035, the First Tier Tribunal (FTT) a taxpayer gave 'remarkably little' evidence to demonstrate that he occupied a property as his only or main residence, as a result his claim for Capital Gains Tax (CGT) Private Residence Relief (PRR) was denied.

  • On 9 April 2010, Mr Patwary purchased a property in Emmott Close, London.
    • It was sold on 26 February 2016, making a capital gain of £202,170.
  • Mr Patwary claimed that he lived at the property from 9 April 2010 to 31 October 2013, together with his girlfriend (who he later married and divorced), and a tenant, who shared the whole property with them.
    • Prior to this, Mr Patwary lived at home with his parents.
    • From October 2013 the property was occupied by a tenant.
  • Mr Patwary claimed Private Residence Relief (PRR) on the disposal of the property, which HMRC denied. He Appealed to the First Tier Tribunal (FTT).

To qualify for PRR, Mr Patwary had to demonstrate that the property had been his only or main residence and that his residence at the property showed some degree of permanence, some degree of continuity or some expectation of continuity.

The FTT found that there was 'remarkably little' evidence from Mr Patwary to demonstrate a period of residence in the property of over three years.

  • He walked to work in Bethnal Green where he worked with his father. He saw no need to change his address for anything as his father could bring any post to him daily.
  • He did not register to vote at his new address as he preferred to vote in the more marginal constituency of his parents’ home.
  • He did not need a parking permit at his property.
  • He did not own a TV and so did not have a TV licence.
  • He did not have Council Tax statements for the property, stating that his housemate was responsible for this.
  • He did not think his payslips had his address on them and could not remember whether his marriage certificate had his address on it.
  • He did not provide statements from his lodger, ex-wife, or anyone else who knew his presence at the property.

The FTT noted that the evidence that was produced, such as mortgage statements, water bills, and a bill relating to leasehold services on the block of flats were all of a kind typically addressed to a property owner, even if someone else occupied the property and it was most likely that he lived at his parent's home throughout

The appeal was dismissed.

Useful guides on this topic

PRR: Private Residence Relief
What is Private Residence relief (PRR)? What are the qualifying conditions? Can you claim relief on two homes? How do you claim PRR? Can you claim PRR if you develop your garden?

PRR: Elections
What types of Private Residence Relief (PRR) elections are available? How do you make a PRR election?

PRR: Late election
How do you make a late election to nominate your main residence for Private Residence Relief (PRR)?

PRR: Private Residence Relief, settled property & granny flats
When can Private Residence Relief (PRR) be claimed for annexes and 'granny flats'? When does it apply to settled property? What are the conditions for relief?

How to appeal an HMRC decision
Disagree with an HMRC decision? How do you appeal, what type of decision can you appeal and what are your different options when you disagree with HMRC? What are the key steps in making an appeal?

External link

Sabbir Patwary v HMRC [2024] TC09035