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Where Taxpayers and Advisers Meet

More than one transfer

Joined:Wed Aug 06, 2008 3:31 pm
More than one transfer

Postby Brightonian » Tue Jun 18, 2019 2:40 pm

A client transferred his former PPR to his wife some years ago for income tax purposes using a deed of trust - she was a basic rate taxpayer and he was higher rate and so she paid less tax on rental profit. However, they are now thinking of selling. The transfer occurred after it had been his PPR, so she will not qualify for PPR on the sale. Is it possible to transfer the property back to him now so that he can benefit from PPR? I can see a practical problem in that there are two periods of ownership for him - one before and one after her period of sole ownership. And I assume that he won't benefit from the final period of ownership being treated as a deemed period of ownership, as much of it will fall into the period when the property was solely owned by his wife. I've never come across this before and should be grateful for any help. I am assuming that he will still benefit from some PPR for the period he lived there and also further relief in respect of the period when it was let out and he was the sole owner.

Joined:Fri May 16, 2014 3:47 pm

Re: More than one transfer

Postby AGoodman » Wed Jun 19, 2019 12:43 pm

Personally, I don't see how he can benefit from PPR at all. s.223(2) (a) + (b) refer to "period of ownership" - singular - rather than "periods of ownership".

I believe there may be other views on the forum

Joined:Wed Aug 06, 2008 3:31 pm

Re: More than one transfer

Postby Brightonian » Fri Jun 28, 2019 9:04 am

Thank you for replying. I find this a very tricky topic. It seems fairly straightforward but has several elephant traps.

Joined:Mon Feb 13, 2017 10:09 am

Re: More than one transfer

Postby someone » Fri Jun 28, 2019 11:38 am

There is a possible loophole they could use if it's not a residence but can be made a residence.

Wife transfers back to husband while it's NOT a PRR residence.

husband and wife make it a residence (evict tenants, furnish)

husband and wife make ppr election in favour of said residence.

Due to a quirk of PPR, while husband inherits original purchase price (again) his ownership for ppr calcs starts from the date it was transferred to him (if it's NOT their PPR at the time, rules are different if it is)

They sell and husband gets last 18 months (i.e.all) exempt from CGT.

(FWIW I think this loophole should be closed and previous occupation history should always be inherited)

Joined:Wed Aug 06, 2008 3:25 pm

Re: More than one transfer

Postby maths » Sat Jun 29, 2019 5:20 pm

Th initial transfer between the spouses at a time when the property was not their sole/main residence means that the recipient (ie wife) acquired the property at its original
base cost to husband but at the date of the transfer.

Any transfer back to husband from wife would again be at the original cost (to husband) but at the date of the transfer back.

There would thus be no back-dating of the dates of acquisition (or assumptions of the transferor's periods of habitation).

Thus, on sale by the husband no private residence relief would be available (nor lettings relief).

In order to obtain any private residence relief it would be necessary for the property to become their private residence again prior to sale (see Someone's post).

Joined:Wed Jun 19, 2019 5:04 pm

Re: More than one transfer

Postby hendersontax » Tue Jul 02, 2019 12:57 pm

In fact, there is a government consultation on this very issue - see The government are proposing to change the rules on PRR for transfers between spouses such that the period of ownership and PRR-use history is transferred regardless of whether or not the property is the couple's main residence at the point of transfer. At this stage it's not clear whether this will apply to transfers prior to change in law, but it will probably come into effect for disposals after 6 April 2020. We should know more on 11 July when the draft Finance Bill is expected to be published.
Tom Henderson ATT(Fellow) CTA

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