Irish Capital Gain

Irish Capital Gain

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Having lived and had a business in UK for many years, husband and wife sold house and business in about the Autumn of 2006. They purchased a property in Ireland with the intention of moving there but also purchased a smaller property in UK so as to keep a base here.

Both returned to UK property for brief visits but after a time husband returned to UK, sometimes living in house but sometimes in rented property owned by an unconnected third party. Wife remained in Ireland but made the odd visit to see husband in UK.

For purposes of UK tax the UK house is used for correspondence, for both husband and wife, and HMRC may not even be aware of the Irish property.

A divorce is in progress. It is understood that separation happened in about February 2007. Currently the UK and Irish properties are up for sale. It seems likely (but not certain) that wife will return to Ireland and may continue to life in the house there, but for the present it is being assumed this will be sold.

The business and all properties are in joint names.

What are the likely capital gains positions of husband and wife? Bearing in mind the circumstances described, what owner occupied relief would be available and to whom? From the date of separation would husband be entitled to it on the UK property and wife on the Irish property? If so, on the whole value of the property or only on the half they each own? Assuming sales take place in current year, what rate of tax would apply to Irish gain? If both were to be regarded as UK taxpayers (as seems likely) what is the UK tax position on the sale of the Irish house?

Readers thoughts and comments will be appreciated.
Paddy

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By User deleted
17th Apr 2008 15:05

PPR Exempt
The UK property is exempt for 3 years after they left it, so until Autumn 2009 the sale will be exempt. IR283 refers. The property in Ireland will also be exempt as they lived there as there genuine home for a couple of years so I do not see a probem.

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