Sale of property

[andrew13]

I Have a CGT query that I would appreciate some advice on.

Purchased property  in 1995 which I lived in for 4 years then got married and moved out, purchased another property and rented  the original property out. The rented property was transferred to joint names around 6 years ago.The rented property was sold in March 2011.

I am aware that ‘Principal private residence relief’ is available to me for the 4 years I lived at the property plus a further 3 years.

I was only recently made aware that ‘Private lettings relief’ is also available, to a maximum of £40k.

Question – Is this £40k PLR to be shared between my wife and myself when completing our tax returns or is £40k available to each of us.

Also when completing our tax returns, with respect to this CGT gain, would I just half the gain on each return and apply relevant reliefs.

Your assistance would be appreciated.

[Incredulum]

If your wife never owned the property whilst she was living there, then she is entitled to neither PPR nor Letting Relief on her 50% share. Sorry.

Your two calculations will therefore look completely different - although the proceeds and base cost will be the same.

[King_Maker]

I suspect the transfer of the property into joint names may have been for Income Tax mitigation?

If so, I hope the IT saving was greater than any extra CGT incurred?