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PPR, letting relief, CGT

PPR, letting relief, CGT

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Husband and wife lived in a house (bought for £80,000) in 1997 until 2007.  They were unable to sell, so it was let out.  As the husband was a HRIT, he transferred 49% to wife by deed of gift and completed form 17.  So the wife declared 99% of rental income in her tax return and husband 1%.  In 2019, they are thinking of selling (MV £300,000) before the changes in PPR/letting relief in 2020.  The wife would like to transfer back to husband 49%, so they both own it 50:50.  The total net gain is £220,000.  In order to calculate the PPR, would the husband effectively be treated as owning 50% for the whole period, so his net gain is £110,000; his PPR including last 18 months is £58,500, letting relief is £40,000, AEA £12,000, so all the gains are wiped out.  The wife's calculation would be similar.

or do I have to calculate the gain on a day by day basis according to the % ownership at the time?

Thank you in advance for any advice.

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21st Apr 2019 17:08

Well firstly you need to use the LPC to declare the husbands underdeclared tax liability if the wife only owned 49%

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to Tim Vane
21st Apr 2019 17:46

I think he transferred 49% leaving him with 1% and wife 99%?

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to Wilson Philips
21st Apr 2019 17:53

Wilson Philips wrote:

I think he transferred 49% leaving him with 1% and wife 99%?

Ah. I see it now. Fair enough.

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21st Apr 2019 22:24

It is currently 99:1 but clients want it back to 50:50 before the sale. Anyway, been confusing myself. The gain is calculated based on the % ownership at the time of sale.

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