Capital gains tax on prime residence

I have read the HMRC guidance, but it is not clear to me on prime residence period calculation for the period and property prior to our marriage. Do we each count prime residence individually, and so we would each have a different prime residence days and a different ownership period, considering the period before we married? This would then mean that we each have a different prime residence percentage and CGT gain. As a married couple it is clear that; 1. we can only have on prime residence, so after our marriage it counts for prime residence days 2. Property transfer between us is at initial purchase price, and so if ownership is later 50/50 the full gain is also 50/50 We have a complex one regarding prime property allowance for my wife’s previous home, and the calculation of prime residence relief. 1.My wife owned a flat as her prime property. She counts prime residence days. 2. We got married and she lived in my flat. As we are married we can only have one prime residence between us, and we are using my flat. My flat is counted as her prime residence, as she lives there. Hers does not count prime residence. 3. A bit later we split ownership in her flat 50/50. As we do not live there neither of us count prime residence days 4. After my redundancy we start flex working and move out of my flat into my wife’s cheaper flat. We both count prime residence days as we now live there 5, We move out of her flat, and rent it out. We get the last 9 months as prime residence, but before that neither of us count prime residence days, as we do not live there. Question is how do we calculate my prime residence days. E.g. Do we each count a different ownership and prime residence period. Ie is ownership for my wife from acquisition, me from the 50/50 split?

Hi,
S222(6) TCGA92 sets out that spouses or civil partners who are living together can only have one main residence between them for the purpose of private residence relief. If when they marry or register as civil partners they each own a residence and they continue to use both as residences, they can jointly nominate which is to be treated as the main residence. The two year period for making the nomination commences on the date of marriage or the date of registration.

Where one spouse or civil partner owns more than one residence, but the other spouse or civil partner does not own a residence and there is no change in this on marriage or registration as civil partners, then a fresh period for making a nomination does not begin. This is because neither spouse nor civil partner has had a change in their combination of residences, and neither of them needs to become a party to an existing nomination to which they were not already a party. A notice under s222(5) TCGA92 only has to be made jointly where it affects both spouses or civil partners.

Where the spouses or civil partners jointly own more than one residence at the date of marriage or on registering as civil partners, and neither separately owns any other residence, a new two year period for making a nomination begins. Even though both spouses or civil partners own the same residences as before, and even if they have both previously nominated the same residence, they now have to make a joint nomination in order for it to be valid from the date of marriage or from the date that they were registered as civil partners.

Thank you

Thanks for the reply. Please confirm how this relates to the period PRIOR TO OUR MARRIAGE. For my wife, does it count as her prime residence for relief purposes from my purchase date in 2011 or does she count independently from our marriage in 2016. “I have read the HMRC guidance, but it is not clear to me on prime residence period calculation for the period and property prior to our marriage. Do we each count prime residence individually, and so we would each have a different prime residence days and a different ownership period, considering the period before we married?”

Hi Mike,
At it's simplest, the amount of relief available is computed by dividing the period in which the property was used as it's owner’s only or main residence, together with the final period of ownership, please see CG64985+, by the total period of ownership.
Thank you.

Thanks very much, that much is clear. Based on it I therefore think that you are saying that we will each calculate our prime residence dates individually and the answer for each of us will be different as a result.