Tribunal rules that CGT applies to non-existent flat

HMRC has won an appeal to charge £61,383 in capital gains tax on a property that had not been built. The Upper Tribunal decided HMRC was right to apply the tax to Desmond Higgins, who paid a reservation deposit on an off-plan property in 2004 which was not finished until 2010. He sold the property in 2012 and was assessed by HMRC as owing capital gains tax of £61,383 for the tax year 2011-2012 – assessed including the period leading up to 2010, when the property had not yet been built. Higgins appealed to the First Tier Tribunal, arguing that the period of his ownership was coterminous with the period when the apartment was his main residence so that he was entitled to main residence relief on the whole of the capital gain accruing to him on the disposal on 2012.

FT Adviser Economia

Posted 04/10/2018