Is this a second home? Liable to capital gains tax?

[kaben]

Hello,
help for a friend if anyone knows how this situation works?

Friend got a job 20 years ago and the job had onsite accomodation, which for context was “free” in exchange for extra hours of work (over the initial 35 hours per week) and being available for emergencies.

She worried that she wouldn’t ever get on the property ladder, so bought a terraced house with a mortgage and rented it out, whilst living at work accomodation. After about 10 years, her work sold the building she lived in and so she had to move out. She decided to rent a 1 bed flat very near work as living in her owned house would have involved a commute and she was settled in the work area. She has lived in this rented flat for another 10 years, whilst tenants have lived in her owned house for the entire 20 years she’s owned it (not the same tenants, they’ve changed a few times).

She has been served notice by her landlord so can no longer live in the flat. She is therefore thinking giving notice to her tenants and selling her house so she can buy a property close to her work.

since she has only owned the one property, will it attract capital gains tax upon sale? Because she has never lived in it - living either at work or in her rented flat.

further context if relevant: friend is single, no kids, and earns £40k.

thanks for any help

Yes, I know. The thing is that you need evidence to prove your intention to live in it. That's a VERY hard thing to persuade the tax inspector! They don't just roll over and accept what a taxpayer says you know!! You have to look at ALL the evidence in the round. The longer someone owns a house without moving into it, the harder it is to prove your intention to the tax inspector, especially if you end up never living in it.

In tribunal/court cases, evidence has included documentation/emails between the taxpayer and estate agent showing intent to live their as their home, or enquiries with local service providers or local clubs/societies etc., or friends/family living close to the house, etc etc. All kinds of "evidence" can be used to prove intent, but lack of any evidence makes it virtually impossible to prove intent.

It's just so much easier to prove when the taxpayer initially lived in the house as their home, before moving to workplace accommodation.

No car or cannot drive? A car will be a lot cheaper than capital gains tax assuming she has decent equity in the property, and she'd be saving money by not renting somewhere else as well. If she can drive, buying a second hand but reliable car seems like an easy win here.