Mr A J Clark v Commissioners for Her Majesty's Revenue and Customs

Facts

The appellant, Mr A.J. Clarke, appealed against assessments raised by HMRC on 9 January 2009 for the tax year ended 5 April 2006 and on 16 January 2009 for the tax year ended 5 April 2003, following an enquiry in which HMRC concluded that he was not entitled to Principal Private Residence relief on two properties at 60 Nayland Road and 58a Nayland Road. The appellant, who ran his firm from a barn behind the matrimonial home at Oaks Farm, had lived there with his wife and two daughters until his wife's affair and fragile mental health, attested to by a psychologist, made the atmosphere intolerable. On 17 July 2002 he bought 60 Nayland Road, improved it and moved in with his elder daughter, intending to leave Oaks Farm permanently and to provide a sanctuary for his children; his wife refused to agree to a sale of Oaks Farm. He funded the purchase with a twelve-month NatWest business loan, the quickest route available, intending to repay it by selling the attached land. After obtaining planning permission on 15 November 2002 he decided to develop the land himself as 58a Nayland Road, sold 60 Nayland Road in March 2003, stayed with his mother, and moved into 58a in July 2003 room by room. His wife's attempted suicide in July 2005 caused him to return to Oaks Farm, and 58a was sold in November 2005.