'Flip' Your Second Home to avoid Tax, says the Telegraph
The newspapers have yet to tire of the details of the expenses row. The practice of 'flipping' homes to avoid Capital Gains Tax has come in for particularly harsh - and justified - criticism. But it may be that MPs were simply following the advice offered in the same newspapers' personal finance sections. Consider the following:
‘Become a butterfly and flit between homes. Or in the jargon, switch "principal private residence" exemptions between properties. All gains on property are taxable with the exception of the home you live in which the taxman calls your principal private residence. However, if you own more than one home you can elect which you wish classed as your primary residence, provided there is some evidence that you have actually resided there, albeit shortly. If you live for even a matter of weeks at any stage in your "second" home, this enables you to write off the last three years of capital gains when you come to sell.’
Excellent advice, in a piece by Teresa Hunter headlined 'Home, sweet Second Home', published on 25th June 2007 in the Daily Telegraph. The piece also urges money-conscious readers: 'Don't forget to claim expenses'.