Residence and CGT

L

Leon

Guest
I recently got married. My query relates to my wife owning her own home independantly of me and I also have my own home independantly of her. Can we both claim to reside in our own homes and avoid payings CGT should we choose to sell one of the properties in the future?
If not, it would seem that we will incur a big tax bill just because we got married?
 
If either, or both, of you were to sell your home now you would be selling your principal private residence and wouldn't pay CGT. If you move in to one of the houses now and sell the other one in future you would be hit for CGT as it wouldn't be your principal private residence. In theory you could continue to live separately and ultimately when you sell it would still be your principal private residence. You will save a few quid in tax and some people might say that living in separate houses is the secret to a long and happy marriage!!!
 
podowd said:
If you move in to one of the houses now and sell the other one in future you would be hit for CGT
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Not exactly right, youve a year of grace. So she could move in with you now (July 2006) as long as she sells by July 2007 you are not hit with CGT. Though if you rent during that period you should pay tax on the rent. After July 2007 she is liable for CGT on the profit gained during that period, so if she sells in July 2009 she pays CGT on profit from July 2007 to July 2009. Certain costs can be written off against the CGT (management fees if she used one during renting, overheads of purchase, solicitor etc) you need to speak to an accountant about this. You should always get advice from an accountant as CGT is complicated.
 
so if she sells in July 2009 she pays CGT on profit from July 2007 to July 2009.
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No - the profit over the whole period of ownership is charged, with relief given in proportion to Period of occupation / Period of ownership
 
thanks everyone for your replies.
I will speak to my wife about living separately and maybe call around for dinner and drop off the washing.......
 
I presume you're being facetious but if you're not then bear in mind that that won't work since a married couple can only have one joint PPR.
 
Not exactly right, youve a year of grace. So she could move in with you now (July 2006) as long as she sells by July 2007 you are not hit with CGT.
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I rang Revenue today to enquire about a PPR someone is thinking of renting out for a year before they sell. Would this year's grace on CGT apply here? According to the Revenue phonecall, there is no such grace period in this scenario.

Please you you tell me where you found out about this year's grace?
 
umop3p!sdn said:
According to the Revenue phonecall, there is no such grace period in this scenario.
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Did they offer you any proof to back this up? If not, their advice, to misquote Groucho Marx, is not worth the paper it is written on.
 
Hi umop3p!sdn,

I am by no means an expert on this at all, Im currently selling my property and that was explained to me by my accountant and confirmed by my solicitor. My property was my PPR for 4.5 years and rented for approx 3 years.

Id recommend you to speak to an accountant, I have to say, I genuinely thought it was as you thought and that that year of grace would apply in your scenario.

Sorry Im not much more help.
 
Anything here from revenue. See Chapter 5 section 5 Partial Relief (second part) Pg 15

Quote from site
However, a period of up to twelve months immediately before the end of the period of ownership is treated as a period of occupation even though the owner may not have been actually living in it during that period.​
 
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