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Tolley's Statutory Residence Test  

[13.3]

Where an individual spends time in more than one property, or there is a possibility that more than one property could be considered a 'home,' he will need evidence both to demonstrate the substance and quality of his occupation of the property and to demonstrate the number of days he spends there (time spent in the property need not be overnight for the purpose of the 'home' test).

HMRC guidance (at para 12.6, RDR1) provides an extensive list of records which should be kept in order to provide evidence for the purpose of the 'home' test:

'`•     General overheads – utility bills which may demonstrate that you have been present in that home, for example, telephone bills or energy bills, which demonstrate usage commensurate with living in the property.

•     TV/satellite/cable subscriptions.

•     Local parking permits.

•     Membership of clubs, for example sports, health or social clubs.

•     Mobile phone usage and bills pointing to your presence in a country.

•     Lifestyle purchases pointing to you spending time in your home – for example, purchases of food, flowers and meals out.

•     Presence of your spouse, partner or children.

•     Engagement of domestic staff or an increase in their hours.

•     Home security arrangements.

•     Increases in maintenance costs or the frequency of maintenance, for example having your house cleaned more frequently.

•     Insurance documents relating to that home.

•     SORN notification that a vehicle in the UK is “off road”.

•     Re-directed mail requests.

•     The address to which you have personal post sent.

•     The address to which your driving licence is registered.

•     Bank accounts and credit cards linked to your address and statements which show payments made to utility companies.

•     Evidence of local municipal taxes being paid.

•     Registration, at your address, with local medical practitioners.

•     What private medical insurance cover you have, is it an international policy?

•     Credit card and bank statements which indicate the pattern and place of your day by day expenditure.''

This is an extensive list, and it is extremely unlikely that many individuals would be able to produce everything on it! These records are intended to indicate either quality of occupation (the property being the emotional centre – flowers, club, family – etc) or time spent there (utility bills, cleaning costs etc). As a result, different records will be significant for individuals with different circumstances.

In some circumstances, the existence, or lack, of some kinds of evidence may prove to be of limited relevance – for example, an individual is unlikely to be registered with a local medical practitioner or be a member of a gym if he only spends 30 days at a given home. In such cases, utility bills may well be of increased relevance, as will evidence from phone bills (including mobile phone bills) and cash machine withdrawals or credit card and bank statements which evidence expenditure in nearby shops/restaurants. Although HMRC suggests retaining records of what it terms 'lifestyle purchases', in practice very few people are likely to keep receipts when they purchase flowers. However, bank and credit card statements may be helpful for reconstructing such purchases if evidence is later required.

Where an individual has a limited presence at a property, evidence of the quality of his occupation is likely to take on additional significance – in order to prove that the property should be considered a 'home' and not merely 'available accommodation'. The nature of this evidence will vary from individual to individual, but in some cases the membership of nearby clubs may be relevant. It is not included on HMRC's list but, potentially, evidence of home improvements or the purchase of furniture may be of relevance in demonstrating that a property is an individual's home (especially where large or expensive items are purchased, since these might demonstrate the degree of permanence needed for a property to be considered a 'home'). Individuals may also find it useful to retain evidence of previous long-term occupation (eg utility bills, etc) since HMRC guidance suggests that it is difficult for a property to cease to be a 'home' when it has once been one.

Although a case about CGT Private Residence relief rather than 'home', the First Tier Tribunal case of Regan v Revenue and Customs Comrs (No 2) [2012] UKFTT 570 (TC), [2013] SWTI 198 is instructive for the kinds of evidence which a court may consider in trying to determine whether a property is an individual's 'home.' In this case, the court looked at where post was sent (putting particular emphasis on correspondence from HMRC), evidence of the appellant's registered address on the electoral roll and whether the appellant entered into any credit agreements from the address as well as considering where he kept his things. In another private residence case of 2015 before the First Tier Tribunal, William P Harrison v HMRC [2015] UKFTT 0539 (TC), the taxpayer owned a farmhouse which he considered to be his main residence and also made main residence elections on several flats, which he claimed to be 'second residences'.  He failed in his claims, the tribunal distinguishing between 'occupation' and 'residence'. Although he kept a change of clothes and cooking utensils 'sufficient to function' at the flats, he had no television, telephone or computer and did all his paperwork at the farmhouse. Such things were considered important to make a property a residence. The case of Sharon Booth [2018] UKFTT 770 (TC) is also similarly instructive. In this 2018 First Tier Tribunal case, HMRC based their argument that the property in question was not a principal residence largely on the evidence of council tax payments, thus showing the importance of these in indicating quality of occupation. In making their judgment against the taxpayer, the Tribunal noted the missing evidence: utility bills (which would have evidenced the activities of living such as cooking and washing); receipts showing purchase of furniture, kitchen equipment and personal possessions, and evidence of change of address.  Interestingly, the Tribunal also considered that the taxpayer could have provided third party evidence (eg from neighbours). The issue of council tax payments was also pertinent in the recent private residence relief cases of Ives v HMRC [2023] TC 08989 and Patwary v HMRC [2024] TC 09035. In Ives, the taxpayer had claimed reduced council tax for the period in question but, although the Tribunal were 'troubled' by the fact that claims for council tax reduction had been made, they commented that 'what matters for us, of course, is not whether Mr Ives' council tax exemption claims were properly made … but whether he was actually in occupation of the properties'. Also in Ives, perhaps heeding the FTT's advice in Booth, the taxpayer's case relied heavily on witness statements from friends and neighbours testifying that he had occupied the properties in question. The case of Patwary demonstrates the importance of the taxpayer being able to adequately prove their case. In Patwary, the taxpayer produced only a very brief witness statement and limited documentary evidence of residence at the property in question. Although the tribunal accepted that his explanation (that he had lived in the property concerned until his marriage broke up) 'did not seem improbable', they nevertheless concluded that he had not discharged the burden of proof to show that the assessment was incorrect.

Although for private residence relief the court was in each of these cases considering a different test from 'home', the HMRC guidance quoted above suggests similar evidence will be used in the latter case.

It will be particularly difficult to provide evidence in cases where the character of an individual's occupation of a property changes (for example, from a 'holiday home' to a 'home' or from available accommodation to a 'home'). As noted at 5.6 the distinction between a home and a holiday home may itself be unclear, see the guidance on what constitutes a holiday home in Henkes v HMRC [2020] UK FTT 159 (TC) at para [157] where the FTT focussed on where the taxpayer and his wife spent their time living 'their everyday life' despite strong roots to their property in Spain including a long-standing relationship with a local doctor and a lawyer, good relationships with the neighbours and the use of various local service-providers. The FTT concluded that it was not convinced that any of those factors was indicative of the fact that the property is a residence, as opposed to a holiday home.

HMRC guidance (RDR1, para 12.8) includes an additional note in relation to a 'holiday home' becoming a 'home':

''Where your home has changed from a holiday home to your home, for the purposes of the SRT, the change in occupation could be evidenced by, amongst other things:

          •     utility bills which may show an increase in usage

          •     changes you have notified to:

          –     local municipal authorities, or

          –     the company providing your buildings and contents insurance.''

Although HMRC guidance does not appear to consider that a home could cease to be a 'home' and become a 'holiday home', where an individual wishes to claim that it has done so (see para 8.18), presumably similar evidence would be useful. Certainly one might expect to notify one's insurance company if the property is to be left empty for prolonged periods. It would also be advisable for an individual to document his intention to change the use of the property and, where relevant, keep records of any requests to redirect mail and other changes of registered address – for example, with banks, on driving licenses etc. Where belongings are moved from such a property, evidence of this – eg van hire, removal company invoices – should also be retained.

Where available accommodation begins to be a home, this is also a qualitative change and useful evidence might include evidence of removal costs – where additional belongings are transferred to the property, or the purchase of (relatively) expensive furniture. Evidence of decorating and other home improvements (either professional or DIY) might also be useful as it may indicate a stronger level of emotional investment in a property. At the point when temporary accommodation begins to be an individual's home, in some cases he may register with a doctor/dentist, arrange for his post to be redirected, and/or take out a subscription to satellite television. However, this kind of evidence may not be available in circumstances where an individual has more than one property which could be considered a home.