If you bought your home brand new and 'off-plan' you may realise a significant capital gain when you sell that property.
This is not a problem if you occupied the property as your main home for your entire period of ownership. In that case principal private residence relief
should cover the whole of the capital gain and there will be no tax to pay on the disposal. However, an issue arises if there was a delay between the
date you acquired the property and the date you moved in.
For newly built properties there can be a considerable delay between exchanging contracts to purchase (generally regarded as the acquisition date for any
property) and the completion date when you move in. As HMRC have insisted that any gain is apportioned equally to every day of ownership, even when
the property is not finished, the taxable gain attributed to the period when the building was incomplete can be considerable.
Fortunately, this problem has been resolved by the Court of Appeal which has ruled that the ownership period starts when the purchaser acquires full legal
rights to occupy the property. This means the period from signing a contract to buy (the contract exchange date) to the date the owner is given the
keys is not subject to tax.
If you have already paid capital gains tax as HMRC argued the gain on your half-built new home was taxable, you may be able to claim a refund of that tax.