[2010] UKFTT 582 (TC)

TC00832

Appeal number: TC/2010/02707

 Capital Gains Tax -- whether property was taxpayer's only or main residence -- meaning of residence -- Section 222 Capital Gains Act 1992 -- appeal dismissed

FIRST-TIER TRIBUNAL

TAX 

	MALCOLM SPRINGTHORPE	Appellant

	- and -

	THE COMMISSIONERS FOR HER MAJESTY’S
	REVENUE AND CUSTOMS	Respondents

		TRIBUNAL: 	GUY BRANNAN (TRIBUNAL JUDGE)							DAVID E. WILLIAMS CTA (TRIBUNAL MEMBER)		

Sitting in public at Byron House, Nottingham on 15 October 2010

Anthony Pearson FCA for the Appellant

Philip Oborne for the Respondents

© CROWN COPYRIGHT 2010

DECISION

1.	This is an appeal against an amendment by closure notice to a self-assessment tax return for the year ended 5 April 2006. The closure notice was issued on 1 May 2008. The issue in the appeal is whether a property owned by the Appellant constituted his principal private residence for the purposes of capital gains tax relief.
2.	The evidence in this case comprised a bundle of documents produced by HMRC, sworn witness evidence given by the Appellant and photographs of the property, 15 Derby Road, Kegworth ("the Property"), which is the subject matter of this dispute, taken by the Appellant.
Undisputed facts
3.	The Appellant was divorced on 7 October 1997. His main outgoings at that time included a mortgage of £180 and maintenance of £804.75 per month.
4.	Shortly after his divorce, in February 1998, the Appellant learned that he was to be made redundant in 1999. It appeared to the Appellant that he would be unable to meet his financial commitments. He therefore decided to sell the former matrimonial home (33a King Edward Street, Loughborough) and buy a property which would require renovation and which would not require a mortgage.
5.	The former matrimonial home was sold on 6 November 1998 and the Appellant moved in with his brother at an address in Loughborough. On 30 October 1998 the Appellant telephoned HMRC and gave them 2 High Street, Kegworth as his mailing address. 2 High Street was the address of Mrs Irene Parry who had worked with the Appellant in a secretarial capacity prior to his redundancy. Subsequently, Mrs Parry became the Appellant's partner. Initially, the Appellant stated that he had called HMRC on 30 October 1999, but in the course of the hearing it was accepted on behalf for the Appellant that the date was 30 October 1998, as shown in HMRC's records.
6.	In August 1999 the Appellant was made redundant.
7.	On 10 November 1999 the Appellant purchased the Property for £47,000. In previous correspondence and in the original capital gains tax computations submitted on behalf of the Appellant the purchase price for the property was shown as £47,999. At the hearing, the Appellant accepted that this had been a mistake and the correct purchase price was £47,000.
8.	The Property required considerable renovation which was mainly carried out by the Appellant himself.
9.	Following an inspection of the Property by the North West Leicestershire District Council ("the Council"), the Property was exempted from Council Tax from 19 November 1999 to 20 July 2000. In a letter dated 12 October 2009 addressed to HMRC, the Council stated that the Property had been exempt from Council Tax:
"... due to alterations taking place to render it uninhabitable. To award this exemption there would have been a visit by our inspector to the property to verify that the work was of a sufficient nature to qualify as uninhabitable e.g. structural work such as damp proofing, re- plastering, new floors, wiring etc. I cannot tell which of these factors would have been applicable as we do not keep our records further back than six years.
On 21 July 2008 class N full exemption was awarded as the property became occupied solely by students and continued up to 31 March 2001, and remains exempt under class N to the current day."
10.	The electricity and water supplies were connected throughout the period of the renovations. During the hearing, the Appellant confirmed that the gas supply had been turned off and was only reconnected in March 2000 once a central heating system had been installed. 
11.	On 1 August 2000 the Appellant was employed part-time at Loughborough University, having been unemployed since his redundancy in August 1999. 
12.	From July 2000 the Property was let to students.
13.	In September 2003 the Appellant commenced full-time employment at Loughborough University.
14.	On 1 September 2005 the Property was sold for £160,000.
HMRC's enquiry
15.	On 14 June 2007 HMRC issued a notice under section 9A Taxes Management Act 1970 ("TMA") advising of the Appellant of HMRC's intention to enquire into his tax return for the year ended 5 April 2006. The enquiry was into the sale of the Property.
16.	In a letter also sent on 14 June 2007 to the Appellant's accountant, Mr Pearson, HMRC raised certain queries concerning the capital gains tax computation that had been submitted in respect of the disposal of the Property. The queries related to the use of a November 2000 valuation as the base cost for the property and to the computation of taper relief.
17.	Mr Pearson replied to HMRC's letter on 28 June 2007 as follows:
"Mr Springthorpe bought the property on 10 November 1999 and lived there while refurbishments took place until the property was ready to be let in September 2000. £89,000 was the value of the property when lettings commenced and it became subject to capital gains."
18.	HMRC did not accept the use of a November 1999 valuation as a base cost of the Property and required the Appellant to bring in the original cost price as amended in respect of any improvements. HMRC suggested that instead of the original basis of computation, the Appellant should consider whether the Appellant could claim principal private residence relief and lettings relief ("PPRR").
19.	In a letter dated 24 July 2007 addressed to Mr Pearson, HMRC asked for information to show that the Property had been the Appellant's principal private residence for the purposes of section 222 Taxation of Chargeable Gains Act 1992 ("TCGA").
20.	In a letter dated 9 August 2007 from Mr Pearson to HMRC (enclosing a letter from the Appellant to Mr Pearson dated 6 August 2007) it was confirmed that the Property was the Appellant's principal private residence from 10 November 1999 until the Property was occupied by students (July 2000), at which time the Appellant moved to 2 High Street, Kegworth (Mrs Parry's address) where he resided until April 2006.
21.	On 4 September 2007 HMRC requested details of two other properties owned by the Appellant. Those details were supplied by Mr Pearson in a letter of 30 November 2007. Mr Pearson stated in his letter that the first property, 13 High Street, was purchased in March 2006 and the Appellant and his partner had lived there since April 2006. The second property, 12 Derby Road  "…was purchased in 2003 with a view to letting it. He [the Appellant] spent some time renovating the property but it was never actually let. His partner's mother moved into the property shortly after the death of her husband. She occupies the property rent-free."
22.	On 11 January 2008 HMRC wrote to Mr Pearson querying whether the Property had been used as the Appellant's principal private residence.
23.	Finally, on 1 May 2008 HMRC issued a closure notice amending the Appellant's return for the year ended 5 April 2006 denying the Appellant's claim for PPRR.
The statutory provisions
24.	The Appellant claims in respect of his disposal of the Property that it was his only or main residence for the purposes of the exemption from capital gains tax in section 222 TCGA. The Appellant has also claims "lettings relief" under section 223(4) TCGA in respect of the period of time when the Property was let. However, lettings relief applies only where the gain was one to which section 222 TCGA applies. Section 222 provides, so far as is relevant, as follows:
"(1) This section applies to a gain accruing to an individual so far as attributable to the disposal of, or an interest in –
(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...."
Submissions on behalf of the Appellant
25.	Mr Pearson submitted that the Appellant had occupied the Property as his residence while he refurbished it. In May 2000 the Appellant considered for the first time letting the Property to students. By that time the Appellant had been unemployed for several months and his deteriorating financial position prompted him to consider the possibility of letting the Property; until that time the Appellant had intended the Property to be his home and had considered the possibility of advertising for lodgers.
The Appellant's evidence
26.	The Appellant confirmed that he had been divorced on 7 October 1997. 
27.	In February 1998 he discovered that he would be made redundant at some time in 1999. As a works director of the company, he obtained advanced knowledge of his impending redundancy.
28.	The Appellant said that he had telephoned HMRC on 30 October 1999 and gave them 2 High Street, Kegworth as his only secure address. He said that it was his only address of any sort at that time. Subsequently, the Appellant accepted that the date of the telephone call was 30 October 1998, as per HMRC's records.
29.	He bought the Property on 10 November 1999.
30.	The Property was in poor condition and required extensive renovation.
31.	When he purchased the Property the Appellant said it was fitted with card meters for gas and electricity. Although he considered that these would have been ideal for students, he had removed and replaced them with credit meters which were more suitable, in his view, for domestic use.
32.	The Appellant said that he was advised by Mr Alan Smith, a local builder, that he did not have to pay Council Tax while he was renovating the Property. He therefore contacted the Council and they sent an inspector to check the Property.
33.	According to the Appellant the inspector did not say that he could not live at the Property. He said he had made no secret of the fact that he was living there but accepted that inspector had not seen the third floor of the building where the Appellant said he was sleeping. At the time of the inspection he said that he was re-wiring the Property so the floorboards had been taken up and the Property must have looked "in a dreadful condition."
34.	The Appellant confirmed that the electricity and water supplies were connected throughout the period of the renovation. The gas supply was, however, turned off until March 2000 when the new central heating system was installed. Therefore, his gas bills showed only a charge for the meter. In order to heat the Property the Appellant used two Calor gas heaters. The Appellant also stated that the reason why his electricity and water bills were low was because he was the only occupant of the Property and that he was engaged in manual work during the day, and so he required little in the way of heating.
35.	Various photographs of the Property were produced by the Appellant. These showed the Property at various stages of the renovation and also included photographs of the garden. The Appellant said that these photographs showed that the renovations had been completed to a high standard, including fitted carpets throughout the Property, new windows, a new fitted kitchen and bathroom, burglar alarms, matching curtains and a fully stocked and turfed garden. The Appellant said that these renovations were all carried out to a much higher standard than was necessary for student accommodation.
36.	The Appellant referred to three letters, contained in the HMRC bundle of documents, which stated that he had lived at the property during the renovations.
37.	The first letter dated 10 November 2009 was from Mr A Desbrow, whom the Appellant said was a neighbour who, according to the address on the letter, also lived in Derby Road:
"To Whom It May Concern
I can confirm that Mr R Springthorpe lived at 15 Derby Road, Kegworth during the renovation of this property. I can remember calling round to see how the work was progressing on several occasions."
38.	The second letter was from Mr G R Hawes and was also dated 10 November 2009. The letter, which was on the letterhead of Hawes Plant Hire Limited, read as follows:
To Whom It May Concern:
We have carried out remedial and alteration work for Mr R Springthorpe. With regard to 15 Derby Road Kegworth we carried out various repairs and alterations between January and March 2000.
During this time Mr Springthorpe was in residence at the said property."
39.	The third letter was from Mr James Blowers of Blowers Bros, Estate Agents. His letter dated 18 November 2009 read as follows:
"Dear Mr Springthorpe
RE: 15 Derby Road, Kegworth, Derbys
It is unfortunate that all our office records state your mailing address to be your girlfriend's at 2 High Street, Kegworth, Derbys.
I do however recall our very first meeting at the house and although you were embarking on some major refurbishment, it was evident to me that you were living there.
You may remember the state of your bedroom and indeed other areas of the house, covered in pieces of stripped wallpaper, I had commented to you that you must look like the "paper mache" man first thing in the mornings. I don't believe there was an item of clothing or linen unaffected by the mess.
I am however aware that you moved out of 15 Derby Road at the time the property was rented to a group of students. This was your preference instead of taking in lodgers as initially discussed.
You will appreciate our records are namely [sic] relevant to the tenancy in itself. Perhaps if any of your neighbours are still resident they may be able to assist you further."
40.	In the Appellant's view these letters supported his contention that he was resident in the Property during the renovations.
41.	The Appellant said that by May 2000 he had been out of work for eight months. He therefore thought he would take in a lodger to offset some of the property costs. He consulted an estate agent, Blowers Bros, who advertised in the village. The estate agent suggested that the Property would be ideal to let to students. The Appellant said that this was the first time he had considered letting the Property.
42.	The Appellant said that from 1 August 2002 he was employed part-time at Loughborough University. A tenancy agreement with students was signed in July 2000 and they moved into the Property in September 2000.
43.	The Appellant said that the Property was the only property he owned during the period 6 November 1998 to 13 June 2003. On 13 June 2003 he purchased a property, 12 Derby Road, Kegworth, jointly with Mrs Irene Parry. Mrs Parry purchased a 70% interest in this second property and the Appellant purchased a 30% interest. This property was initially occupied by Mrs Parry’s mother and after her death, by Mrs Parry’s daughter and her partner, who still occupy it.
44.	The Appellant confirmed that the Property was sold on 1 December 2005.
45.	Mr Oborne cross-examined the Appellant. Mr Oborne asked whether there was any other form of heating apart from the two Calor gas heaters. The Appellant replied that in addition to the heaters there was an oil-filled radiator which he did not use very much because he found the two Calor gas heaters worked much better.
46.	Mr Oborne asked the Appellant why he had applied for an exemption from Council Tax on the basis that is property was uninhabitable. The Appellant replied that he had not applied because the property was uninhabitable but had applied because of the amount of work that had to be done. All the floorboards needed to be taken up because all the gas fires and pipe work had to be removed. In the Appellant's view the documentation supplied by the Council did not say that it was not possible to live in the property.
47.	Mr Oborne asked the Appellant whether he slept in the property at night. The Appellant confirmed that he did and that he had moved a bed into the Property.
48.	Mr Oborne asked how the Appellant cooked at the Property. The Appellant said that he bought meals from local chip shops and takeaway restaurants. He could boil a kettle and make toast, and breakfast was the only meal that he usually prepared at the Property.
49.	Mr Oborne asked the Appellant about washing facilities since there was no working bathroom in the Property. The Appellant replied that he washed himself in the sink which he moved into the centre of the kitchen.  There was a working outside lavatory. The bathroom was eventually installed in February or March 2000.
50.	The Tribunal asked the Appellant why he had given 2 High Street, Kegworth (Mrs Parry's address) to HMRC as a secure address and why he had described it as his "only address." The Appellant explained that after the sale of the former matrimonial home, he had moved in with his brother (who had since died). He used 2 High Street as a secure postal address because his brother's lifestyle was that of a "wheeler dealer." His brother's house had been burgled and five grandfather clocks were stolen. He did not feel comfortable having his correspondence going to his brother's address. He said that 2 High Street was the only postal address, although he was living with his brother. He confirmed that 2 High Street was the address of Mrs Irene Parry. The Appellant said that he did not consider the Property itself was a secure address since it backed onto a derelict property that had been subject to damage and vandalism.
51.	We asked the Appellant what the Council's inspector had seen when she came to inspect the Property. The Appellant said that the inspector had seen the first and second floors and the outside of the property but had not seen the third floor where he slept.
52.	We asked whether the Calor gas heaters and the oil filled radiator were the only sources of heat. The Appellant confirmed that they were.
53.	We asked the Appellant when he moved into Mrs Parry's house, 2 High Street. The Appellant stated that he moved into Mrs Parry's house in September 2000. Mrs Parry was a widow who had two grown-up daughters. She worked as a temporary secretary for an employment agency and had been seconded to work at the company which employed the Appellant prior to his redundancy. She worked partly for the accounts section and partly for the Appellant. The Appellant explained that Mrs Parry had rented out a room to lodgers for several years, frequently to employees from NatWest's nearby computer centre. When the Appellant moved into Mrs Parry's house in September 2000 the previous lodger had just moved out. The Appellant said that that he had had a relationship with Mrs Parry since November 1997. They would go out for drinks and for meals but she was not at that stage his partner. Mrs Parry became his partner when he moved into 13 High Street, Kegworth in April 2006, the house which he occupies with Mrs Parry today.
HMRC submissions
54.	Mr Oborne disputed the Appellant's contention that the Property was the Appellant's principal private residence from November 1999 until August 2000. He submitted that the onus of proof was on the Appellant to show on the balance of probabilities that his occupation of the Property was of such a quality that it was his home.
55.	Mr Oborne referred to Mr Pearson's letter of 28 June 2007 quoted in paragraph 17 above. He noted that Mr Pearson now agreed that the basis of computation that he had originally used in computing the Appellant's capital gain in respect of the Property was incorrect. Nonetheless, Mr Oborne suggested that this letter indicated that the Appellant saw an opportunity to renovate and let a rundown property. He submitted that on the evidence supplied to HMRC it was apparent that the Appellant had only occupied the Property in a limited capacity while renovations were being carried out and that it was also HMRC's view that the Appellant's occupation was only of a temporary nature and lacked the necessary degree of permanence or continuity required of a residence for capital gains tax private residence relief purposes.
56.	Mr Oborne said that the Appellant had been asked to produce evidence of his residence at the Property in the material period. Mr Oborne suggested that the Appellant should have been able to produce evidence of his residence at the Property from DVLA records, gas, water and electricity bills, letters from banks and letters regarding building and contents insurance. Mr Oborne submitted that no such evidence had been supplied, except in the case of water bills from Severn Trent Water.
57.	Mr Oborne referred to the PowerGen electricity bill for the period from 10 November 1999 to 15 February 2000. The total bill amounted to £21.82. This comprised a £0.81 prepayment surcharge, a charge of £5.08 for daytime units, a £6.88 charge for night units, a standing charge of £8.02 and VAT of £ 1.03. Mr Oborne referred to the other PowerGen bills and stated that from the period 10 November 1999 to 3 October 2000, a period of 47 weeks, the Appellant's electricity bills averaged only £1.90 per week. This low level of electricity consumption indicated, in Mr Oborne's submission, that the Property was not occupied as a home during this period.
58.	Mr Oborne referred to a bill dated 7 June 2000 from British Gas for the period 28 February 2000 to 6 June 2000 which showed a total cost of gas used as £10.01. Again, in Mr Oborne's view, this low level of usage indicated that the Property was not used as a home.
59.	As regards the three letters from third parties are referred to the Appellant in his evidence (paragraphs 36 -- 38 above), Mr Oborne commented that none of these letters contained a Statement of Truth and none of the writers of those letters had been called as a witness so that it was impossible for HMRC to test what they said in those letters.
60.	Mr Oborne submitted that the Appellant had not demonstrated that he had occupied the Property for any purpose other than refurbishment with a view to letting and that, in HMRC's view, PPRR was not available.
61.	Mr Oborne referred to the letter from the Council of 12 October 2009 (referred to in paragraph 9 above). In his view the Appellant had convinced a Council official that the Property required such renovation that he could not live there. Mr Oborne referred to the Council Tax (Exempt Dwellings) Order 1992 SI 558 which he said required the Appellant to show, in order to obtain exemption, that the Property was unoccupied, unfurnished and subject to major repair work. Mr Oborne also pointed to a requirement on the Council's website to notify the Council within 21 days if a person claiming the exemption has reason to believe that the property in question was no longer exempt. Mr Oborne noted that the Appellant did not notify the Council and if this was out of ignorance of this requirement, then ignorance was no excuse. A reasonable man would at least have contacted the Council to find out what he should do.
62.	Mr Oborne referred to a letter from the Appellant to Mr Pearson dated 9 November 2009. At paragraph 8 of that letter the Appellant stated:
"I can verify that an inspection took place with floors up, kitchen gutted, no bath but the outside toilet working. My view on this is I managed to get a year with no Council Tax at a time with no income."
63.	Mr Oborne submitted that HMRC's view was that the Appellant did not notify the Council because the Property was not being occupied as a home during the period in dispute.
64.	Mr Oborne reminded us that in Spring 2003, the Appellant and Mrs Parry had purchased 12 Derby Road with a view to letting it. In Mr Oborne's submission this indicated a pattern of purchasing a rundown property, renovating it and then letting it to a tenant. Although 12 Derby Road was never actually let, it was occupied by Mrs Parry's mother rent-free. Mr Oborne suggested that this was a non-commercial arrangement and indicated a close relationship between Mrs Parry and the Appellant before April 2006 (which is when the Appellant said Mrs Parry had become his partner).
65.	As regards the photographs produced by the Appellant, Mr Oborne observed that the photographs of the kitchen showed that the plumbing had been installed and the walls painted but no kitchen units had been installed; there was no sink and no cooking facilities. In another photograph taken from the rear of the property the windows were obscured by some form of whitewash and there were no curtains at the windows.
66.	Mr Oborne referred to section 222 TCGA. This requires a property to have been a person's "only or main residence." In Mr Oborne's view this meant that the taxpayer must have lived in the property as his home. The onus of proof was on the Appellant to establish his claim. Mr Oborne submitted that the case-law established that the occupation of a property as a home implies a degree of permanence, continuity or expectation of continuity. Mere temporary occupation did not satisfy the test for PPRR. Mr Oborne noted that the statute did not specify a time period for occupation. The test was therefore not one of duration but of quality and that documentary evidence was crucial in establishing the facts.
67.	Mr Oborne cited Sansom and Another (Ridge Settlement Trustees) v Peay (HM Inspector of Taxes) 52 TC 1. Mr Oborne drew attention to the comment of Brightman J at page 6E where he equated "residence" with "home":
"The general scheme of section [222] is to exempt from liability to capital gains tax the proceeds of sale of a person's home."
68.	In Frost (HM Inspector of Taxes) v Feltham 55 TC 10, a case concerning whether a house was used as the person’s  main residence for the purposes of mortgage interest relief, Nourse J said at page 13 I:
"A residence is a place where somebody lives.”
69.	Next, Mr Oborne referred to the following comment of Millett J (as he then was) in Moore v Thompson (HM Inspector of Taxes) 61 TC 15 at page 21, in relation to the question whether a caravan constituted a dwelling house:
"In order to qualify for the exemption, therefore, the taxpayer must establish that the disposal is a disposal of a dwelling house... and that it has been the individual's only or main residence…."
70.	Mr Oborne submitted that the comment of Millett J made it clear that the onus of proof was on the Appellant to establish his claim. 
71.	Millett J also addressed the question of temporary residence at page 24:
"It is clear that the Commissioners were alive to the fact that even occasional and short residence in a place can make that a residence; but the question was one of fact and degree for the Commissioners...."
72.	Mr Oborne referred us to the decision of the Court of Appeal in Goodwin v Curtis (HM Inspector of Taxes) 70 TC 478. In that case Millett LJ cited what he described as "the classic exposition of the meaning of "residence"" in the speech of Viscount Cave LC in Levene v The Commissioners of Inland Revenue 13 TC 486 at page 505 where he said:
"My Lords, the word "reside" is a familiar English word and is defined in the Oxford English Dictionary as meaning "to dwell permanently or for a considerable time, to have one's settled or usual abode, to live in or at a particular place." No doubt this definition must for present purposes be taken subject to any modification which may result from the terms of the Income Tax Act and Schedules; but, subject to that observation, it may be accepted as an accurate indication of the meaning of the word "reside". In most cases there is no difficulty in determining where a man has settled or usual abode, and if that is ascertained he is not the less resident there because from time to time he leaves it for the purposes of business or pleasure. Thus, a master mariner who had his home in Glasgow where his wife and family lived, and to which he returned during the intervals between his sea voyages, was held to reside there, although he actually spent the greater part of the year at sea (Re Young, 1875, 1 Tax Cases 57; Rogers v Inland Revenue, 1879 1 Tax Cases 225). Similarly a person who has his home abroad and visits the United Kingdom from time to time for temporary purposes without setting up an establishment in this country is not considered to be resident here."
73.	Mr Oborne drew specific attention to the concepts of permanence and the need for a settled or usual abode contained in the above quotation from Viscount Cave LC.
74.	Millett LJ also said at page 510:
"Temporary occupation at an address does not make a man resident there. The question whether the occupation is sufficient to make him resident is one of fact and degree for the Commissioners to decide."
75.	Schiemann LJ, concurring with Millett LJ, said at page 510:
"I accept, as did the Commissioners, the respondent's contention that in order to qualify for the Relief a taxpayer must provide some evidence that his residence in the property showed some degree of permanence, some degree of continuity or expectation of continuity."
76.	Finally, Mr Oborne referred to a decision of this Tribunal (Judge Guy Brannan and Ms Roberta Johnson) in Favell v HMRC Commissioners [2010] UKFTT 360 (TC), where paragraph 40 the Tribunal stated:
"We have decided that the Appellant has not discharged the burden of proof required to demonstrate that he occupied the property as his only or main residence during 2001 or at any other time. There is a complete absence of objective documentary evidence to show that the Appellant resided at the property."
Our findings
77.	After careful consideration of the evidence put before us, we have concluded that the Appellant did not occupy the Property as his residence between November 1999 and September 2000 for the purposes of section 222 TCGA. It is for the Appellant to satisfy us on the balance of probabilities that he occupied the Property as his only or main residence and, in our view, the Appellant has failed to discharge the burden of proof.
78.	Whilst we consider it likely that the Appellant did spend some time occupying the Property in the relevant period we think that he did not occupy it as his home. The minimal electricity bills, the fact that there were no cooking facilities and that the gas had been switched off until March 2000 with the result that there was no hot water available for washing indicates to us that the Appellant was unlikely to have lived at the Property for the whole of the relevant period, including, as it did, the winter months. It seemed to us more likely that he stayed there occasionally but that he also stayed elsewhere.
79.	In any event, we are satisfied that the Appellant's occupation of the Property, such as it was, was occupation for the purpose of renovating the Property with a view to letting it. The Appellant's occupation was not occupation of the Property as his residence. It is clear from the authorities, in particular the decision of the Court of Appeal in Goodwin v Curtis (HM Inspector of Taxes), that the occupation of a property must have some degree of permanence, some degree of continuity or expectation of continuity in order for that occupation to qualify as residence (see, in particular, the comments of Schiemann LJ cited in paragraph 74 above). It is clear that the test is a qualitative test rather than one which looks predominantly at the period during which a property was actually occupied. As Millett J said in Moore v Thompson (HM Inspector of Taxes) (at page 24 cited in paragraph 70 above) even short or occasional residence in a property can make that place the taxpayer's residence. However, Millett LJ in Goodwin v Curtis (HM Inspector of Taxes) himself contrasts short or occasional residence with temporary occupation, which latter, he says, does not make a person resident at a particular address. The factor which the learned judge clearly had in mind was the quality of occupation -- the degree of permanence, the degree of continuity, or the expectation of continuity -- which is a question of fact and degree to be determined by this Tribunal.
80.	Applying this test to the evidence we heard, we concluded that the three letters from third parties stating that the Appellant lived at the Property while he was renovating it did not contradict our conclusion. Those letters do not, we believe, address the quality of the Appellant's occupation of the Property. Likewise, we did not see anything in the photographs that the Appellant produced to us which helped us to assess the quality of his occupation of the Property; they clearly demonstrated that very substantial works had been done to the Property, and that it had been comfortably furnished on completion of those works, but these improvements would clearly have been just as necessary had the Appellant’s intention from outset been to let the Property, as they would have been had he intended from outset to use it as his own home. We took note of his claim that some of the work, especially to the garden, was of a higher standard than would have been appropriate to a student let, but in our view this was, as Mr Oborne for the Respondents commented, essentially a subjective opinion. Finally, we did not attach great importance to the Council Tax treatment applied by the local authority (see paragraphs 9 and 61 above). On the Appellant’s own admission (paragraphs 33 and 51 above) he did not show the authority’s inspector the room on the second floor in which he said he was sleeping, and in our opinion she may have assumed that nobody was living at the property at the relevant time.
81.	In this case, we do not consider that the Appellant has demonstrated on the balance of probabilities that the quality of his occupation of the Property was such as to make the Property his residence. Putting the case at its highest from the Appellant’s viewpoint, the evidence produced to us seemed to indicate the he had not definitely made up his mind, when doing the renovation work, whether to sell, let or live in the house when it was completed. We have concluded that, to the extent that the Appellant did occupy the Property, he did so for the purpose of renovating the property rather than occupying it as his home which he expected to occupy with some degree of continuity. Thus the quality of his occupation and his intentions in respect of his occupation of the Property do not satisfy the test in section 222 TCGA. 
82.	For the reasons given above, we dismiss this appeal.
83.	This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009.   The application must be received by this Tribunal not later than 56 days after this decision is sent to that party.  The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice.

GUY BRANNAN

TRIBUNAL JUDGE
RELEASE DATE: 11 November 2010