CGT & PPR exemption following spouse transfer

CGT & PPR exemption following spouse transfer - spouses having different periods of occupation

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My clients A & B were married in June 2013.  At that time, they each had their own private residences. 

A had lived in her bungalow since pre 1982 and had inherited the property in 2004 on her Father's death

B had similarly lived in her house for many years and had inherited this on her father's death in March 2013.

On marriage, the couple lived in B's house until it was sold in Jan 2018, they then moved in to A's bungalow together.  They also now transferred the ownership of the bungalow into their joint names last month.

It appears they are likely to live there for a further couple of years and then may sell up.

If this happens, the PPR position for A seems clear, she owned it from 2004 to the point of sale, with the period from marriage in June 2013 to sale in 2018 being a chargeable period, the remainder being covered by the exemption.

What I am uncertain of is B's position.  I understand that on the transfer of the ownership into joint names of a property which is their main residence, she will effectively take over the period of ownership of A.  Is she also deemed to take over the periods of private residence from her spouse, i.e. for the period 2004 - June 2013?  TCGA 1992 S 222 (7) (b) states that if para (a) applies (the transfer from one spouse to another of a property which is their only/main residence) but the dwelling house was not the only/main residence of both throughout the period of the one making the disposal (A in this case, and it wasn't) account shall be taken of that period during which it was his (her) only or main residence as if it was also that of the other.

Does this suggest that B does take on the periods qualifying for private residence exemption from A?

Any thoughts very gratefully received.

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Portia profile image
By Portia Nina Levin
04th Oct 2018 11:08

Yes. If B acquires her interest in the property from A while it is occupied as their main residence, then B inherits A's ownership history, including periods of occupation.

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