As can be seen from examples 3 and 4 the taxpayer has saved £7,008 in capital gains tax by electing for property B to be his exempt residence for the six months from July 2003 to January 2004.
The main reason for the tax saving in example 4 is that on the sale of property B the last 18 months of ownership was exempt. As from 6 April 2020 this will change to the last nine months of ownership.
The individual had up to two years from July 2003 (assuming property B was first used as a residence of the individual in July 2003) to make an election for property B to be treated as his PPR. This is two years from the date his combination of residential properties changed. The election then applies from the date on which that particular combination of residences first occurred.
Where a dwelling house is acquired, the date on which there is a new combination of residences will not necessarily be the date of acquisition: it will be the date on which the dwelling house was first used as a residence. Similarly, where an individual ceases to use a dwelling house as a residence, the date on which there is a new combination of residences will be the date on which the dwelling house is no longer used as a residence: it will not necessarily be the date on which that dwelling house is disposed of.
A variation of a notice will apply from the date specified in the notice of variation which may be up to two years before the giving of the notice. A variation of a notice can be made at any time. Therefore, after electing property B for PPR a variation can be made at any time thereafter and it can be backdated up to two years from the date that variation is made.
There is no statutory form for a notice under TCGA 1992 s222(5) to elect for a dwelling to be treated as an exempt property or for a variation of such a notice. However, the following are requirements of such a notice or variation:
a nomination by an individual must be made to an officer of the Board and must be signed by the individual
spouses or civil partners who are living together can only have one main residence between them for the purpose of private residence relief. If a nomination affects both of them it must be made by notice in writing to an officer of the Board and must be signed by both of them
where one or more of the residences is occupied by a person entitled to occupy it under the terms of a settlement, the notice must be in writing to an officer of the Board and should be signed by both the trustees of the settlement and the person entitled to occupy the residence
the signature of an agent is not sufficient.
Do remember that from April 2020 taxpayers may easily overlook the in-year CGT reporting and payment requirements that apply. The most obvious group being those involved in buy to let or as above 2nd properties. The in-year requirement is that a return and payment of CGT is made within 30 days following the completion day for a UK land (including buildings) transaction when there is a charge to capital gains tax. There are very few exemptions.