Capital Gains Tax proposals removing option to elect main residence are unfair, says CLA

20 June 2014

The CLA today (20 June) submitted its response to the Government consultation on proposals to remove the ability to choose a main residence for Capital Gains Tax (CGT) purposes.

The CLA said proposals in the Government consultation “Implementing a capital gains tax charge on non-residents” to prevent homeowners electing their primary residence could lead to many facing unfair taxation.

CLA President Henry Robinson said “Those who own a house but spend more days in rented property, for instance due to work commitments, could face CGT on their property if HMRC decides it is not their primary residence.

“This could cause considerable difficulties for the many people who live and own a home in the countryside, but who are obliged to work and rent accommodation in towns because that is where the jobs are.

“We urge the Government to reconsider this proposal.

“Our response makes clear that it is unfair for HMRC to be able to decide which property is to be considered a primary residence.

“If the removal of the election goes ahead, homeowners should have the ability to make a reasonable case as to which property is their main residence rather than basing tax calculations on the number of days spent in a property.”