Initial spouse to spouse tfr/3rd party disposal

[russ23]

Dear All
Mr A bought a property in 1994 and in 1999 he transferred 50% to his wife before they both sold it as a joint property in 2011.

Facts:

i) 1992-1994 - Mr A lived in the property as his PPR
ii) 1994-1997 Employed full-time overseas
iii)1994-2011 Let
iv) He never moved back in after 1994 and his wife never lived there
v) Purchased new property with wife in 1997 and this became their PPR upon purchase

I believe that:

- Property qualifies for PPR 1993-1995
- Overseas deduction 1994-1997 (Despite never moving back in)
- Last 3 years deduction
- Letting relief £40,000 each (Lower of the 3 possibilities)
- Upon transfer the base cost for Mrs A is an A/A+B calc using 50% of MV at date of transfer and she will also benefit from rolled up indexation allowance as the property as purchased <1998 and sold <2008. Mr A will not benefit from rolled up IA.

Although I could be wrong on the above the main consideration is that I believe that Mrs A may benefit from the deductions (ie. PPR/Overseas) even though she didn't own it before 1999 and in fact never lived in it at all. Further to that if she is treated as 'standing in his shoes' I presume that she will also be entitled to the last 3 years rule.

Any views/comments will be greatfully received.

Thanks

[Peter D]

You wife did not live in the property as an owner so PPR and LR does not apply to her. How did you transfer a share to her and what was the share %
Your dates do not match up.

[russ23]

Dear Peter

Thanks for the email...I thought I had proof read it...clearly not very well.

It was purchased in 1992 and PPR 1992-1994

I am guessing that she would have been added to the title deeds and became a 50% joint owner - no money was exchanged for her 50%.

So other than rolled up IA are you saying that she will not get any deductions for her period prior to her ownership and will not get Letting relief or the last 3 year exemption either as it was never her PPR?

Thanks in advance

[Peter D]

Correct she will have no relief other than her Capital Gains allowance of £10,600.
Can you be more accurate with you dates and stae the values and fees at acquistion and disposal including sales and legal fees. Did you seek legal advice when you did the transfer to your spouse. Regards Peter

[russ23]

Thanks Peter

This was a question from a client rather than for me - and alas at this stage about all of the information that I have to hand.

Re: Legal advice....I would think probably not.............

Is the 'rolled up' Indexation Allowance aspect not available in your opinion?

[Peter D]

Indexation went out years ago. Regards Peter

[russ23]

Iappreciate that IA ceased to be available from 2008 however I thought that under certain circumstances (such as this) that the transferee was able to take the indexation available and have it 'rolled up' into part of their base cost.

Thanks