Updating post from Reddit.
Hi all,
I currently have a 25/75 beneficial ownership split with my wife on a property that I am planning on selling. I am the sole legal owner and there is a mortgage under my name. I lived in the property as my main residence from 2002. It has been rented out since 2009.
The ownership split has been in place since 2016 and we have been filing tax returns on this basis. I understand for CGT purposes my wife inherits my acquisition cost but does not inherit my private residence relief (PRR) on any capital gain. Is this correct?
I would like to clarify whether HMRC would accept a beneficial ownership change prior to the sale of the property that effectively allows the PRR to cover a greater proportion of the capital gain.
Is there a minimum period the updated beneficial ownership would need to be in place before the sale of the property? Or would submission of the updated beneficial ownership to HMRC prior to exchange of contacts be acceptable?
Thanks for reading and sharing your views.
I’ve certainly done exactly what you propose, shortly before the sale, and HMRC never queried it.
Thanks, did you revert the beneficial ownership fully back to yourself or increased your share? Did you post the trust deed / declaration of assignment to HMRC prior to exchange of contracts?
Sorry, can’t remember specifics now, this would have been about 10-15 years ago.
Probably a question for an Accountancy reddit group
How big is the gain and how long the PRR. Unless massive or you have other gains it is hard to see how this will save enough to justify doing.
The minimum.perid is zero anyway. Do mortgage company know you don't have the full beneficial interest? They will have a say in the matter.