Client purchased a property in Manchester in his sole name in 2011 for approximately 500,000. He immediately moved into the property with his wife. They lived their (main residence) from 2011 to 2016.
In mid 2016 they moved out and started renting the property out and bought another house on the coast that they moved into in 2016.
In early 2018 the original house in Manchester was transferred from the husband's sole name into joint names wioth his wife so now owned 50/50. They are now looking at selling the Manchester house for around 950,000.
He is a HR tax payer; she is a BR tax payer.
When half the house was transferred into her name then her base cost will be 50% x her spouse's base cost .. so 250,000. On sale she is credited with half the proceeds so 475,000 so a gain of 225,000. Same for him.
I am concerned that the timing of the transfer into joint names here may not have been good.
If it had stayed in his sole name he would have got PPR relief on the whole property for the period from 2011 to mid 2016 plus last 9 months at the end.
Now he will get PPR relief against his share of the gain but my understanding of the rules for PPR relief is that as the house was not his wife's PPR at the time she received her share of the house then she gets no PPR relief. Is that correct or can she claim some PPR relief.
If this is correct is there anything that can be done to reduce her CGT liability or to get some relief or is it just too late now.