Capital Gains Tax

please understand that this is purely a theoretical exercise and does not refer to any living person.

Let us assume that somebody lives away from home quite a lot, in this depression not unusal, they have to go where the work is. Now then they move to, let us say London, and stay with a friend, maybe even a family member. To whom they give money, say GBP25,000 a year. Now then they declare that this is then their main residence, and therefore the home where they have left their wife and children is their second home, which they paid a small sum of money for but which has increased in value.

Now maybe they lose their job in London and fall on hard times, so hard that they have to move back to the home where they have left their wife and children, leaving their main residence far behind them.

Money is so short that they then have to immediately sell their home far outside of London. However, surely it was not their main residence because the main residence was earlier the London home. Accordingly, there must be Capital Gains Tax payable because you have to pay CGT on the sale of any home which is not your main residence unless you have lived there for more than six months. That is of course also that the home outside of London was in joint names, or ot could be just in the name of your partner. In which case the partner is not liable for CGT.

I think that the Capital Gains Tax rules need to be changed. I would suggest that it should be immediately abolished and replaced with the irrefutable fact that everything should be treated as income and taxed fully accordingly. It is CGT which is the problem, not allowances. Just get rid of it, especially with the Great Depression II about to hit with the spectre of deflation.