CGT on Primary Residence? – Don’t be too hasty to judge

A question on Capital Gains for a Primary Residence when I’ve never strictly permanently lived in the property in question…don’t be too hasty to judge, (I hope) there are a few mitigating factors!

My mother sold the family home back in 2008, gifted me a sum of money and with that (and other private savings) I bought a flat in my name in mid-2010, taking out a residential mortgage. The initial plan was for us to live together, but life changed and given she was suffering from ill health and approaching 70 (hence the reason I took out the mortgage) the reality is that she went on to live in the flat rent free until she passed away in 2015.

At all times my mother was the only person permanently living in the flat and as such she was the only person listed on the Council Tax for that period. However, the Ground Rent and Maintenance Charges payable on the property were in my name and of course, I continued to maintain the residential mortgage until I recently sold the flat (Nov-2017). In Nov-2013 I bought a house with my wife, before then I had rented various properties with her. At point of purchase of this house, I believe it became my Primary Residence, (whereas previous to this, it was the flat my mother was living in).

So my question is, given the flat I bought was not a buy-to-let, I received no income from it and when I purchased it, it was the only property I owned, can I reasonably claim that at the time of purchase (Apr-2010) up until the day I bought my house with my wife (Nov-2013), that this flat was my primary residence and I can use that period to calculate a relief on my capital gains relating to its sale? This is despite the fact that (although it was my original intention) I never lived in the flat with my mother for longer than a week at a time as I almost immediately moved into rented accommodation with my girlfriend (then wife) instead.

My interpretation of the situation is that, by definition, given it was a residential mortgage, was not intended as an investment property and it was the only property I owned between Apr-2010 and Nov-2013, it has to be classed as my primary residence. I’m hoping there are some parallels with, e.g. a husband that buys a property with his wife and then immediately moves out (for some sad reason) and rents a flat for a period of time whilst they attempt to sell the family home. At point of sale of that family home, surely the fact he has not been living in the house does not change the fact that it is his primary residence (also akin to when a couple separately own two properties and have to elect which one is their primary residence as soon as they get married and move in together).

Thanks in advance for any advice or further reading you can point me in the direction of. I’m aware that when it comes to filling in my tax return for this year I will undoubtedly require professional advice, but any comments ahead of that meeting will no doubt be very useful.

Dustin

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