I have a client who bought a flat back in August 2006 that she used as her private residence until December 2008. During this time, her partner was in the military and would stay with her when he was off duty. To my knowledge, he had no other private residence during this period.
The property was then let and has been ever since in my client's sole name. During this period, the pair have married and my client is now looking at selling the property. She is looking at putting the property into joint names in order to possibly split the CGT liability.
My client will be entitled to PPR relief for the period she lived there, along with relief for the last 18 months of ownership. She will also be entitled to £40000 of letting relief.
My query is with regards to her husband. I understand that the transfer will be no gain/no loss and he will effectively acquire half the acquisition and enhancement costs. Would he however be able to claim any PPR relief for when he stayed there when my client first bought the property, and therefore would also be entitled for relief for the final 18 months, or does this only apply to periods after the transfer is actually made? I assume he only acquires half the acquisition and enhancement costs rather than the property use history and therefore would not be entitled to any letting relief.
Many thanks for any contributions.
Replies (6)
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This link (if it opens, did for me) is quite interesting re the question as to conditions as at time of transfer of ownership.
https://www.taxation.co.uk/Articles/2012/02/01/35091/spouse%E2%80%99s-tr...
Also CG64950
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64950
Interesting. With regards to CG64950, would the couple have had to have been married at the point at which they were living in the property together for this to apply, or is the fact that they are married at the point of transfer enough to then obtain the PPR for the periods he was staying with the now wife?
HMRC Manuals link includes:
"The following conditions must be fulfilled.
The husband and wife or the civil partners must be living together, as defined by ITA07/S1011, see CG22070, and the residence must be their only or main residence at the date of the transfer."
The couple in the Taxation question & answer linked meets that. The couple in the OP seems not to do so.
They might consider a transfer sufficient to utilise his CGT AE, but there will be no PPR or LR for the transferee spouse