Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.
For the avoidance of any doubt from what you say your mother has continued to occupy the property as her main residence since your mother and father separated. Is that correct please? She has not lived anywhere else during that period?
that is correct
I note you say she has always lived in the property
my dad currently earns between £25 and £30k per year and is looking to retire or take semi retirement shortly - he thinks by disposing of the asset in this way that he will be liable for capital gains tax
Normally the house must be transferred within 3 years of the date of separation in order to avoid CGT however there are a number of exemptions available which give further relief in certain circumstances...
Providing your mother is the only person your father is transferring his interest to in the property AND she has continued to live in the property and treat it as her main residence since they separated then your father can transfer the property to her without liability to capital gains tax.
The precise HMRC guidance on the issues is as follows if it is useful for your records:
The former matrimonial or civil partnership home can be treated as the only or main residence of the transferring spouse or civil partner from the date his or her occupation ceased until the earlier of:•the date of transfer•the date on which the spouse or civil partner to whom the property is transferred ceases to use it as his or her only or main residence
Does the above answer all your questions or is there anything I can clarify or help you with any further?
the hmrc guidance seems very vague to me, doesn't really mention anything about capital gains tax
The guidance is an extract from HMRC handbook on capital gains tax.
would that home be classed as his only or main residence? he has rented his home ever since
The handbook is not user friendly but they produce I pamphlet I can give you a link to if you would like to give it your father.
The key is not yor fathers housing arrangements but that 1) your mother is taking the transfer and 2) she has live in the property as her main residence from the date of separation. Providing she can show these to criteria are met then CGT will not be payable on the transaction.
Is there anything above I can clarify for you?
that is excellent - thankyou
A pleasure. Would you also like a link to the pamphlet you can give your dad?
Sure - jus a moment...
The relevant part is page 4, "Private Residence Relief", the second section comprising the last two bullet points.
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that link does not seem to work - would you be able to email me the pdf?
That's odd I have just checked it and it works for me. Unfortunately I can't email you the pdf but if you google "Helpsheet 281 hmrc" it comes up
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