my client separated from wife no 1 some years ago, she remained in the marital home with the children, they divorced and now a few years later, she has finally bought him out. Looking at s225B, I was merrily ticking all of the boxes and thinking that there was no cgt libaility on this transaction as it looked as if all of the conditions were met (although accepting that there would then be a cgt liability on his current home when that was sold) until we factored in wife no 2...
Wife no 2 already owned a house when my client met her. This was transferred into joint names prior to the second marriage.
Of course a married couple can only have one main residence, so this presumably means that, even though wife no 2 had no financial interest in marital home no 1 and never lived there, if it is his PPR under s225B, then from the date of the second marriage until date of transfer, it will also be wife no 2's PPR for CGT purposes.
Or does this mean that a s225B claim would fail for my client? Because clearly the first house never was wife no 2's main residence.
Would welcome if anyone has any experience or views on this point in practice, thanks.