Carol and Ted live in Somerset but also have a small flat in London which Ted has been using on business trips.

Carol and Ted live in Somerset but also have a small flat in London which Ted has been using on business trips. When they moved to the country, they elected for their Somerset home to be their main home. Now they are planning to sell the London flat. They alter their election so that the London flat is their main home; a week later they alter the election again making the Somerset house their main home. The effect of these changes is that:

1. Since the London flat has been their main home (albeit for a week), the last three years of ownership now qualify for private residence relief. This reduces the CGT due as a result of the sale.

2. When they eventually dispose of the Somerset home, one week’s worth of any gain will be subject to CGT. This is likely to be a trivial sum easily covered by their annual tax-free allowances.

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