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Where Taxpayers and Advisers Meet

CGT Partial relief after gifting share of property

jakdyer
Posts: 13
Joined: Sun Sep 27, 2009 3:26 pm

CGT Partial relief after gifting share of property

Postby jakdyer » Mon Sep 14, 2020 9:50 pm

Hi

I bought a residential property and lived in it until I met someone. I moved out to live with her and rented my property out. We got married and I gifted half the property to her. We are recently divorced and have sold the flat receiving half the proceeds each. In terms of CGT do we both enjoy the benefits of the reliefs available for the entire history of ownership or does my ex wife only befit from the reliefs from the time she was gifted half the property?

Thanks for your observations

Jak

maths
Posts: 7958
Joined: Wed Aug 06, 2008 3:25 pm

Re: CGT Partial relief after gifting share of property

Postby maths » Tue Sep 15, 2020 8:21 pm

The law has recently changed where an interest in a residence is disposed of by one spouse to the other spouse; effective to such disposals on or after 6 April 2020.

Let's assume that the inter-spouse disposal occurred on or after 6.4.20.

In such a case the recipient spouse is teated as if her ownership started at the date you (husband) purchased the property and she also inherits your history.

If, however, the inter-spouse disposal occurred pre 6.4.20 it seems at the date of the transfer the property was not the main/only residence of you(husband) in which case there is no back-dating effect ie wife acquires her interest on date of transfer at a cost equal to that of husband on purchase. It would seem in this case the wife didn't live in the property and hence no private residence relief for her nor any lettings relief.

someone
Posts: 422
Joined: Mon Feb 13, 2017 10:09 am

Re: CGT Partial relief after gifting share of property

Postby someone » Wed Sep 16, 2020 12:07 pm

On this change in the law, if a gift has already been made before the law change, does an additional gift (of say 1%) mean the PPR relief that previously wasn't transferred gets transferred?

If so, would it make sense to do this now while there's no plan of a sale in order to avoid possibly tripping anti-avoidance regulations if done close to a sale?


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