Goodwin v Curtis (Inspector of Taxes)

JurisdictionEngland & Wales
Judgment Date18 February 1998
Date18 February 1998
CourtCourt of Appeal (Civil Division)

Court of Appeal (Civil Division).

Millett and Schiemann LJJ and Sir Brian Neill.

Goodwin
and
Curtis (HM Inspector of Taxes)

David Ewart (instructed by Eric Robinson & Co) for the taxpayer.

Timothy Brennan (instructed by the Solicitor of Inland Revenue) for the Crown.

The following cases were referred to in the judgment:

Fox v Stirk and Bristol Electoral Registration OfficerELR [1970] 2 QB 463

Kirkby v Hughes (HMIT) TAXTAX[1993] BTC 52; 65 TC 532

Levene v IR CommrsELR [1928] AC 217

Capital gains tax - Private residence relief - Taxpayer occupied property for five weeks after putting it on the market and left on completion of sale - Whether general commissioners entitled to determine that property was not his "residence" - Taxation of Chargeable Gains Act 1992 section 222Capital Gains Tax Act 1979, s. 101(Taxation of Chargeable Gains Act 1992 section 222Taxation of Chargeable Gains Act 1992, s. 222).

This was an appeal by the taxpayer against a judgment of Sir John Vinelott [1996] BTC 501 dismissing his appeal from the decision of the general commissioners for Cirencester that occupation of a house for five weeks did not in the circumstances constitute "residence" within the Taxation of Chargeable Gains Act 1992 section 222Capital Gains Tax Act 1979, s. 101.

On 1 April 1985 the taxpayer completed the purchase of a farmhouse with nine bedrooms. On the same day he separated from his wife and moved into the farmhouse. He had already put the farmhouse on the market. A buyer was found and a sale was completed on 3 May 1985 realising a gain. The taxpayer moved to another property which he had purchased and was awaiting completion.

Held, dismissing the taxpayer's appeal:

There was ample evidence to support the general commissioners' conclusion that the farmhouse was not the taxpayer's residence but that he was merely in temporary occupation. It was not suitable for a single man; it had already been placed on the market; and was a temporary measure pending the completion of the purchase of somewhere else to live.

JUDGMENT

Millett LJ: The issue in this appeal is whether the taxpayer, Mr Charles Goodwin, is entitled to relief from capital gains tax underTaxation of Chargeable Gains Act 1992 section 222 section 223ss. 101 and 102 of the Capital Gains Tax Act 1979 in respect of his disposal of the farmhouse at Hazleton Manor Farm on the grounds that it was his only or main residence. Taxation of Chargeable Gains Act 1992 section 222 subsec-or-para (1)Section 101(1) of the Act provides, as far as material:

This section applies to a gain to accruing to an individual so far as attributable to the disposal of, or of an interest in-

  1. (a) a dwelling-house or part of a dwelling-house which is or has at any time in his period of ownership been, his only or main residence …

At the relevant time relief was given by Taxation of Chargeable Gains Act 1992 section 223 subsec-or-para (1)s. 102(1) and in the following terms:

No part of a gain to which section 101 above applies shall be a chargeable gain if the dwelling-house or part of a dwelling-house has been the individual's only or main residence throughout the period of ownership, or throughout the period of ownership except for all or any part of the last twenty-four months of that period.

The facts were found by the general commissioners as follows. In September 1983 unconditional contracts were exchanged for the purchase of Hazleton Manor Farm by a company called Sandloan Ltd. The taxpayer, who was a dealer in property, and who bought and sold properties at profit, was a shareholder in Sandloan Ltd.

On 21 September 1983 an unconditional contract was entered into for the purchase of the farmhouse by the taxpayer from Sandloan Ltd. The farmhouse itself is a substantial residence with nine bedrooms. There seems to be no reason to think that the taxpayer was buying the farmhouse from the company, Sandloan Ltd, as trading stock. He was buying it with a view to making it a home for himself and his family.

Completion of purchase of the farmhouse by Sandloan Ltd took place on 7 March 1985. During this period the taxpayer did not live at the farmhouse. He lived with his wife and family at The Little Cottage, a property which was...

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    ...necessarily amount to residence in that place where, for example, a person's physical presence there is no more than a stop gap measure: Goodwin v Curtis (1998) 70 TC 478, 510; (iii) In considering whether a person's presence in a particular place amounts to residence there, one must consid......
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