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Where Taxpayers and Advisers Meet

Main residence relief

Rows Mum
Joined:Thu Oct 18, 2012 5:39 pm
Main residence relief

Postby Rows Mum » Thu May 20, 2021 8:57 pm

Hoping someone can help with this.

Husband and wife own a property jointly (Property A)which they bought a number of years ago just before marrying. Wife already owned a property (Property B) in a different location. This was her main residence prior to marriage, and for the first two years of marriage was where the couple spent time together. During that two year period, husband lived in Property A and visited wife in Property B (where she lived full time) most weekends. From year three of the marriage, the roles were reversed, with husband living full time in Property A, and wife spending 50 % of her time in each property. Both properties are now being sold - and a much larger gain will arise on the sale of Property B. It seems clear that Property A will have been the main residence from year three onwards and that a claim for relief can be made on the gain arising on the sale of that property. And that wife can claim relief for Property B for the period of ownership pre marriage. But what about the first two years of marriage? What would be the best strategy here? If it matters, all the to-ing and fro-ing was due to husband having established business interests in the location of Property A, and wife being in the same position in the location of Property B.

Thank you in advance.

Joined:Mon Feb 13, 2017 10:09 am

Re: Main residence relief

Postby someone » Fri May 21, 2021 7:24 am

I'm presuming the time in question is more than two years ago and you did not make a PPR election. If you did make an election then the question is moot, your PPR is where you elected it to be. If you didn't make a PPR election then your PPR is decided on the facts.

I'd say the primary residence was the one where both of you lived for part of the week and the second home was where only one of you lived part time but there are things that can change it.

If you can show a compelling case why property B was your main residence even though you spent less time there (an example might be where husband and wife each have a "pied a terre" where they work but share a main home at the weekend) then that might work.

Things that might affect the decision of which is the PPR is where you are registered to vote, which property was main home for council tax and which was second home.

There are opportunities to back date a CGT election where you were unaware of the right to make one - but I suspect HMRC aren't going to look favourably on that now given that you're making the election with perfect hindsight.

Rows Mum
Joined:Thu Oct 18, 2012 5:39 pm

Re: Main residence relief

Postby Rows Mum » Fri May 21, 2021 12:08 pm

Thank you for your response.

No election made, and more than 2 years ago. The gain on property B is c £1m , whilst the gain on property A is a small fraction of that. I don't think there's scope for any argument that Property B could be the main residence from the start of the 3rd year of marriage, but on the facts, it could be for the previous 2 years - presumably notwithstanding that it was only owned by wife and their only jointly owned property was Property A? Electoral roll - husband was registered at Property A, whilst wife was registered at Property B.

Joined:Thu Dec 03, 2009 5:35 pm

Re: Main residence relief

Postby Incredulum » Fri Jun 11, 2021 4:35 pm

They have 14 nights per week between them. There's a good argument that the property where ten of those nights are spent is the main residence.

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