Enter Your E-mail

On separation many couples decide that one party is to remain in the main residence – especially if there are children. If this is the case the sale of the former joint PPR remains tax-free for both parties so long as the property is sold within 18 months after the date of separation and one spouse leaving the family home. The tax charge is triggered by one joint owner’s interest not being fully covered by the PPR exemption.

The only situation where HMRC permit more than 18 months is where the property is transferred to the remaining spouse under a formal financial settlement (a ‘Mesher’ order) AND an election has not been made by the former spouse for another house to be deemed the PPR. A sale will not provide this CGT exemption
.
A ‘Mesher’ order is a court order that postpones the sale of the marital home, the actual date of sale being dependent upon certain specified events.

Of course, if the house is sold after the 18 months having not been transferred to the remaining spouse, then CGT will be due, but only in the proportion of gain made after the 18 months in relation to the total period of ownership or 31 March 1982, whichever is the later date.