CGT, PPR and transfer of equity to spouse.

CGT, PPR and transfer of equity to spouse.

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Hi

My husband and I both lived in a property that we now let for nearly 3.5 years. We got married during this time, and whilst the property was originally in my husband's name, we did a transfer of equity for joint ownership about 5-6 months before we moved out to rent the property.

My question is two-fold:

1. My husband is obviously eligible for PPR, but would I also be, bearing in mind I was only an owner of the property for few months of us living there?

2. I have evidence of me living at the property in terms of bank statements/drivers licence etc, but all the utility bills were in my husbands name. Could this pose a problem? 

Many thanks

 

Replies (6)

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By maxaca
06th Jul 2015 14:22

In the absence of an election PPR is decided on the facts. If your circumstances have recently changed you could now make an election.  A married couple may only have one PPR between them.  You do not have to own a property for it to be your PPR and clearly as you are no longer living there it is not actually your PPR - you can still get the last 18m prior to sale as PPR and you may get some lettings relief.

Is the property for sale -why are you asking?

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Portia profile image
By Portia Nina Levin
06th Jul 2015 14:32

Eh?

If the property was transferred to joint names while occupied as your and your husband's main residence, you inherit his ownership and occupation history (pre-dating even your marriage), by virtue of TCGA 1992, section 222(7).

I am unsure of the relevance of the election, since no other residences have been mentioned.

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By Justin Bryant
06th Jul 2015 14:38

You may have potentially been better off
With your husband gifting it to you after the letting period and then both of you living there as your PPR for, say, 6 months and then selling it as that will wash out the whole letting gain as it is deemed to be your PPR since your husband bought it. Other than that, the only tax savings you will potentially make re the gift are reduced income tax on the rent and an additional CGT annual exemption.

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Portia profile image
By Portia Nina Levin
06th Jul 2015 14:41

@ Justin

The OP suggests that the transfer of ownership occurred while the property was occupied as the residence. A transfer while it is not so occupied does not have the effect of transferring the husband's ownership.

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By Justin Bryant
06th Jul 2015 14:42

Welcome back PNL
I thought you had vanished Lord Lucan style. My post crossed with yours & it's good to see we are thinking along the right lines as usual.

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By Justin Bryant
06th Jul 2015 14:56

Portia
I said they may have been better off i.e. if they hadn't already gifted it then they could have done that particular PPR CGT trick (which does work if gifted 100% by H to W before they move back into it - see my previous posts on that).

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