HMRC Tribunal Boals-Up: CGT “main residence” elections

A capital gain on the disposal of your main residence is exempt from Capital Gains Tax. And if you are fortunate enough to have two or more residences, you can make an election to determine which of them is to be treated as your main residence for CGT purposes.

Of course, you can make the election only in respect of a property which is in fact a residence of yours – you can’t make it in respect of a property you don’t live in: but subject to that you can, as the Act puts it, “conclude that question” (i.e., the question which of two or more residences is to be deemed your main residence) by giving written notice to HMRC within the appropriate time limit. None of this is conceptually difficult and it’s been the law ever since CGT was invented the better part of half a century ago.

And so to the case of Mrs P A Ellis, heard by the First Tier Tax Tribunal in December. HMRC agreed that Mrs Ellis had two homes: they acknowledged that she had made the statutory election to treat one of them as her main residence: but they sought to deny the effectiveness of the election on the basis that although the property in respect of which the election had been made was “a residence” of Mrs Ellis, it was not as a matter of fact her main residence. Mrs Ellis won the case, of course. One can sense the frustration and incredulity of the Tribunal as they explain to HMRC’s representative (one Mr A Boal) what the law says and why HMRC’s submission was “contrary to the plain meaning and effect of that statutory provision.”

So: the case had the right result in the end. But one has to ask how such a meritless case ever came to be heard by the Tribunal. How can Mr Boal have been ignorant of such a basic provision of the law? Did he not read the Act? Was there no internal review of the decision to take the case? If so, what was the reviewer thinking of in allowing the case to go forward? Why should the tax-payer have been put to the trouble and expense of attending the Tribunal to refute an HMRC assertion which was so plainly wrong? We think we should be told!



Sam Inkersole

In 2022, Sam won the Taxation’s Rising Star award at the Taxation Awards in and was named in the Accountancy Age 35 Under 35.

Jon Wedge

While Jon’s client work focuses on the financial services sector, he also oversees the firm’s assurance service, as well as supporting the trainees following in his footsteps.


Elana joined us in 2017 as an ACA trainee, after graduating from Durham University where she had studied languages. She is now a manager in our assurance team.


By submitting this form, the data provided will be used to perform your request according to our privacy policy.