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We both started living in the property at different times will this affect our tax position when we sell?

Question

I bought my house (main residence) in April 2000 for £75,000. My partner moved in 2013 (main residence). We then moved to a bigger house and let out our old house. She became joint owner on a buy-to-let mortgage. We sold the property in September 2019 for £260,000. What portion of capital gains tax are we both liable for?

Arthur Weller replies: 
I am not sure what you mean by 'she became joint owner on a buy-to-let mortgage'. Does it mean that she just became responsible for half the mortgage, or does it also mean that she also became owner of half the house. If the latter (as your words imply), did you transfer while you were still living in the house? And were you married at the time, or just partners? In HMRC’s Capital Gains manual (at www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64950), it states: ‘if one spouse transfers to another spouse while they are living in the house as their main residence, the receiving spouse takes over the principal private residence history of the giving spouse’. Assuming that you did actually give her half the house, you are both liable for tax on half the gain. You are eligible to principal private residence relief on your half, but whether she will be eligible to any relief is dependent on the above conditions being fulfilled.

Property Tax Insider This sample question and answer is taken from Property Tax Insider, a monthly UK tax saving magazine for landlords and property investors.

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