Transfer of Equity - CGT and PPR relief - Unmarried Couple

Hi I own a property with my ex-partner (unmarried) as Joint Tenants. It has been our only residence and we have not been absent from the property at all (other than for holidays) throughout the period of ownership. If they were to transfer their share of the equity to me, will this disposal be eligible for full Primary Private Residence relief? And would the value of the consideration affect this at all? Thank you

Hi Chris Mason,
A gain only arises when you dispose of an asset.
If your ex-partner was to transfer their share of the property to you then they will require to check if they have any gain to declare.
If they have lived in the property for the full time they have owned it and It is their only home then any gain would be covered by private residence relief.
If you sell the property in future and you have continued to live in the property as your only home for the full period of ownership, then your gain will also be covered by private residence relief.
Private Residence Relief (Self Assessment helpsheet HS283)
Thank you. 
 

Hi, Thank you this is helpful. Can I also confirm/clarify please: 1. We currently own the property as Joint Tenants, but have agreed upon an unequal split of the equity due to different contribution percentages. If we needed to covert the Joint Tenancy into unequal shares before completing the transfer, would this conversion also be considered a separate "disposal" from their perspective? (i.e. going from an implied 50% share under the Joint Tenancy, to a 30% share once severed). And if so, would any "gain" from this also be eligible for private residence relief in the same way, given they have lived there as only home for entire period etc? 2. In this situation, how would my ex-partner go about calculating any gain to declare? Would they have to calculate what they originally paid for the property based on the implied share under the Joint Tenancy (50%) or the share we have since agreed (30%)? And then compare this to the actual consideration amount to be received (which would be based on market value of 30% share)? Many thanks, Chris

Hi,

If your partner transfers 20% of her 50% share of the property to you, then this is a disposal as she is disposing of a share of her property. However, as this has been her only home and she has lived in it for her full period of ownership then this disposal would be covered by Private Residence Relief.

Your partner’s first disposal would be for the 20% element which is covered by Private Residence Relief. When the property is sold, her acquisition cost will be based on the 30% element as she has already disposed of 20%. The 30% element would again be covered by Private Residence Relief if this is the only property she owns and she has lived in it for the full period of ownership. You can see guidance here:

Private Residence Relief (Self Assessment helpsheet HS283)

Thank you.