Share this content

CGT main residency relief after split

Two properties involved

Didn't find your answer?

I wondered if anyone could point me in the right directly in regards to PPR.  

Mr and Miss (never married) bought their main residence jointly 20 years ago and lived together for the first 10 years.  After 10 years they decided to separated, still good friends they purchased a second property again owned jointly where Mr lived for the next 10 years whilst Miss continued to live in the old house (now for 20 years in total). 

Both houses are now being sold so they can finally separately their financial involvement with each other.  There are deeds of trust in place for both houses so their beneficial interest is 55% to Miss and this is how the proceeds will be split. 

Therefore, Mrs main residence has been the same all along for the 20 year period.  Mr therefore had his main residence as the first house for the first 10 years and then the second house for the next 10 years. 

With regards to the first house, as its jointly owned will Mr be liable for CGT on his 50% (or 45% beneficial ownership) of the house for the 10 years it was not his main residence?  Similarly, will Miss be liable to CGT on the second house that only Mr lived in for her 50% ownership (or 55% beneficial ownership) as it has never been her main residency.

Or should they both be able to claim full main residence relief on their relevant properties and have nothing more to worry about? 

Replies (4)

Please login or register to join the discussion.

By The Dullard
14th Apr 2021 14:45

I admire your optimism.

Thanks (0)
Replying to The Dullard:
By Tax Dragon
14th Apr 2021 15:03

"should they both be able to claim full main residence relief on their relevant properties"

Presumably that answer to that (as worded) is: yes.

But it won't be so on their irrelevant properties - which is why there's probably tax.

Thanks (1)
By More unearned luck
14th Apr 2021 17:37

Your clients might want to change their plans and make property swaps, if relief is due under s248A TCGA1992 et seq. If there are mortgages SDLT might also need to be considered.

Thanks (0)
Replying to More unearned luck:
By More unearned luck
14th Apr 2021 17:43

I retract this. The properties are 'excluded land'.

Thanks (0)
Share this content