The Upper Tribunal’s decision in Higgins illustrates one of the pitfalls of buying flats before they are ready for occupation. 
Mr Higgins agreed to buy a flat before it was constructed, signing an agreement in 2006. Building work took longer than anticipated and completion took place only in January 2010, when Mr Higgins moved into the flat. He occupied it as his main residence until he sold it in 2012.
He claimed that the sale was exempt from capital gains tax, on the basis the flat had been his main residence throughout his period of ownership. However, HMRC disagreed, noting that he started occupation only in 2010 – and that the capital gains tax rules allocated the gain on a time basis, over the full period of ownership. Sadly for Mr Higgins, the Upper Tribunal has agreed with HMRC, overruling the First Tier Tribunal.
Effectively, buying off plan means that any gain is likely to have an investment element, now taxed at 28%.