CGT relief on 2nd PPR

NewClareman

Hi,

Hope someone can help with this.

We want to sell my wife's house, which was her principle private residence, prior to marriage. We now live in my house which is the PPI for both of us.

Will we get proportional CGT relief for the period of time her house was her PPR?
Thanks in advance.

StevenToast

NewClareman wrote: »

Hi,

Hope someone can help with this.

We want to sell my wife's house, which was her principle private residence, prior to marriage. We now live in my house which is the PPI for both of us.

Will we get proportional CGT relief for the period of time her house was her PPR?
Thanks in advance.

Yes, plus the final 12 months before sale

NewClareman

StevenToast wrote: »

Yes, plus the final 12 months before sale

That's what I thought too, but two items raised a doubt:

1. A discussion with a tax official.

2 this extract from the Revenue guidance:

3.18 Married persons and civil partners
In the case of spouses or civil partners living together -
(a) only one residence can qualify for exemption under Section 604 and a notice
under Section 604(8) is required from both spouses or civil partners (para 16);

The piece that worries me is that it says only one residence can qualify for exemption.

Grueller

NewClareman wrote: »

That's what I thought too, but two items raised a doubt:

1. A discussion with a tax official.

2 this extract fro the Revenue guidance:

3.18 Married persons and civil partners
In the case of spouses or civil partners living together -
(a) only one residence can qualify for exemption under Section 604 and a notice
under Section 604(8) is required from both spouses or civil partners (para 16);

The piece that worries me is that it says only one residence can qualify for exemption.

My reading of that is that you will only be selling one house as the other will remain your ppr? Therefore only realise a capital gain to be taxed on one.

StevenToast

You can only have 1 PPR at any given time....your wife will get PPR relief for the time she lived in it plus the last 12 months....

When she moved in with you that house became her new PPR.

NewClareman

StevenToast wrote: »

You can only have 1 PPR at any given time....your wife will get PPR relief for the time she lived in it plus the last 12 months....

When she moved in with you that house became her new PPR.

That part is grand. The issue is whether she will get PPR relief for the time she lived in her house and I can then claim PPI on my house (which I lived in since I bought it).

tax_tutor1

Yes you will.
Your wife was not married when she lived in her house and so that was her PPR up to date she moved to your house and qualifies for partial relief on any gain. The last 12 months of ownership also qualifies under the tax rules here as she lived in the house for a period as her PPR.
You lived in your house, your PPR from date of purchase and so will qualify for full relief on this gain.
Suggest you work out the gain on spouses house and see where you go from there. If there are capital losses for either of you then these could be utilised to reduce the taxable gain.

NewClareman

Just some information, for any future readers.

The relevant tax law is s604(9) of the Tax Consolidation Act 1997.
The section is a bit dense, so I was not prepared to trust my own interpretation.

Thanks again, everyone.