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TonyTax
TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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We got married on 18 march 2014 and I sold my flat in

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Hi,
We got married on 18 march 2014 and I sold my flat in may 2014 and received 10k profit. My name only was on the deeds of that property. My wife lived at her previous family home since around 1995 and actually moved out in april 2015. This was from her previous marriage. Her and her ex husband both had their name on the property deeds.
That was her residence from her previous marriage and she lived there until her financial settlement which involved that property was resolved with her ex. In the end, she transferred her interest in the property to her ex and received 85k.
I bought what was to become our family home in May 2015, there was a week between selling my previous home and buying what would be our 2nd family home when I was without a home as it didn't go smoothly. So I purchased our new family home in may 2014 and I move in there. My name is ***** ***** property deeds. It was hoped my wife could move in soon but it took 12 months for her to move out of her property. My wife remained at her property until April 2015 and sold her interest to her ex in may 2015.
We have only became aware of capital gains tax recently.
From what I have read a married couple can only have one principal private residence so we would need to nominate one property as our principal private residence within 2 years of getting married. Then the 2nd property would get private residence relief. My wife would get principal private residence relief on her property as she lived there for 19 years and the last 18 months also count. So we nominate my first property as main residence and the property I then bought after selling my first home as our main private residence. My wife's property receives private residence relief. My wife is currently a non tax payer.
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi. Let me take a look at this and I'll get back to you. It will take some time to draft my answer.
Customer: replied 2 years ago.
Ok, in my original question, I sold my property in may 2014 and the purchase of my new property was completed a week after the sale of my property. My wife moved into our current property in April 2015 and completed the transfer to her ex husband in may 2015. Her ex husband moved back into her old property in April 2015 when she moved out. Both their names were on the deed of that property so it involved transfer of ownership from their joint names to the names of his new partner and his name and my wife received 85k for the transfer.
Expert:  TonyTax replied 2 years ago.
Hi again. I really cannot see what your worry is. An individual only needs to make a main residence election if they have more than one residence available for them to live in. As far as I can see, you don’t and never did and nor does your wife. You are given the last 18 months of ownership of a property as a tax free period where that property has been your main residence. Therefore, both your gain from your property and your wife’s gain from her property will be exempt from CGT. As your wife stayed in the marital home until she sold her interest in it, her capital gain will be exempt from CGT. Even if she had moved out more than 18 months before she disposed of her interest in it to her ex-husband she would have been able to make an election under Section 225B Taxation of Chargeable Gains Act1992 to exempt her gain from CGT. Assuming you now want to put your wife’s name on the title deeds of the property that you live in, you can do that and, provided that you are both living in the property and it is your main home at the time of the transfer of part of your interest to her, then if and when you sell the property, your wife will be able to claim main residence relief based on your record of ownership and occupation in the period before she moved into the property. Take a look at CG64950 andCG64953 here and here. I hope this helps but let me know if you have any further questions.
Customer: replied 2 years ago.
Thanks. Just a couple of things:
My wife moved out one month before the transfer of ownership of her old marital home was completed and her ex-husband then moved into that property. But as you say the last 18 months are also exempt in any case from CGT so that shouldn't be an issue for the transfer of my wife's home.Just looking at the HMRC website and capital gains tax section and there were 2 sections which concerned me slightly https://www.gov.uk/tax-sell-home:
'Married couples and civil partners can only count one property as their main home at any one time.'
and
https://www.gov.uk/tax-sell-home/nominating-a-home
Whether we should therefore need to contact HRMC and nominate one home as our main home or not?
If we don't do anything and don't contact HMRC, then they will decide themselves based on facts themselves and based on the facts we will not have to pay any capital gains tax.
So we don't need to contact HMRC or declare anything in relation to capital gains tax as all three properties (my original home, my wife's marital home and our new home) are exempt from Capital Gains Tax and HMRC will come to that conclusion anyway?
Sorry if my questions seem naive but have only just become aware of Capital Gains tax.
Expert:  TonyTax replied 2 years ago.
You may as well make the election for the sake of simplicity.
You both had interests in different properties when you married. If you and your wife make an election for your property to be treated as the main home from the date of marriage thereby making her own home not her main residence from April 2014, the fact that her interest in it was sold within 18 months of it no longer being officially designated as her main home means the whole gain will be exempt from CGT in any event.
The 18 month rule (or 24 month and then 36 month rule as was) was introduced to allow people to move home and to give them time to sell their previous home within a stipulated period so as to avoid a CGT problem.
Customer: replied 2 years ago.
OK, so we inform HMRC via letter for the purposes of Capital Gains Tax and nominate the property I sold in May 2014 as our main home from our marriage on 18th March 2014.
We also nominate the house I bought in May 2014 as the main home then (there was a week delay before selling my old home and buying the new home but that shouldn't be any issue, I assume).
We indicate that my wife's interest in her previous marital home was transferred in May 2015 to her ex husband and any gain is therefore exempt under Private Residence Relief as the last 18 months of her ownership of the property are exempt from Capital Gains Tax and also that was her only home since 1995 before we got married in March 2014.
That should be sufficient enough for HMRC?
Expert:  TonyTax replied 2 years ago.
It should.
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Customer: replied 2 years ago.
I also rang the HMRC Capital Gains Tax helpline this week and explained our general situation and a Tax Inspector informed me that all is OK and that we don't have to pay any capital gains tax on the properties. So I am not going to take any further action on the matter. Thanks for the advice.