Capital gains tax for civil partners who choose to live apart, and each own a property.

Can you please advise the CGT implications for a civily partnered (CP) couple who are living apart (as is quite common, these days) and each have their own property, the purchases of which precede the CP by many years. In particular, under what circumstances would CGT on a property be due, and would this be calculated from the date of original purchase of the property (well before the couple met), or from a date relating to the time of civil partnership, or nomination of a primary residence . Is it even necessary to nominate a primary residence if both parties remain in their own houses. Examples would be: a) where either party moves area or downsizes independently of the other, or b) partners decide to live together, at a later date 1) necessitaing the sale of one property or 2) prompting the sale of both properties This a complicated area, for which I can find no clear information on the internet so your help is much appreciated. Any additional information which might be useful will also be very welcome. Thanks for your help

Hi,

Where a couple marries or enter into a civil partnership and each partner owned a residence which the couple continue to use after the date of their marriage of civil partnership, they must nominate which residence is their joint main residence as married couples and civil partners can only have one main residence between them.
The nomination must be made within two years of the date of their marriage or civil partnership.
See also guidance at HS283 Private Residence Relief (2023)
For definitive answers you will need to contact us direct either by phone or in writing.

Thank you

I am aware of the need to specify one house as the primary residence. My question, to which I can find no answer in the linked document, is as follows: When CGT is calculated upon the sale (for any reason) of whichever of our two homes is not registered as the primary residence, from what point is CGT on the sale calculated. ie. Is this calculated from the original date the property was purchased (which will precede Civil partnership, or evn our meeting, by very many years) OR is it calculated from the time of the civil partnership, until the property is sold. In short, is there an exemption for the period in which the so called "non primary residence" was actually the sole home of one the partners, prior to the CP arrangement. Example: we each purchase a property worth c. 50K in 1985. At the time of our Civil Partnership, (eg 2025) each property is valued at 400K. We continue to live apart, by choice, each in our own property, but in 2027, nominate one as our primary residence. We sell one property in 2035, when the value is 450K. Is CGT calculated based on the gain in value between 1985 and 2035 (ie 400K) OR the gain between 2025 (our CP date) and 2035 (ie 50K)? (or perhaps the nominated date is the baseline). There is no clear example which I can see equates to this scenario, and it might be useful to include one. Thanks for your help

Hi,

It is calculated from the date acquired. you can then claim private residence relief for the period that it was your only and main residence in order to reduce any charge due.

Private Residence Relief (Self Assessment helpsheet HS283)

Thank you.

Thankyou. Your reply is very useful. Can you tell me if the relief period would continue past the date of any civil partnership, if we continue to live apart and hence the property which isnt designated as the main residence still continues to be the de facto main residence of one partner please.Thanks again for your help.

Hi,

This would need to be looked at based on fact and you would need to write in with details.

Thank you.

My wife & I have just married. We have owned our own homes as PPR before marriage. We get a professional valuation of each house at the date of marriage. If we elect, within 2 years, 1 house as PPR and rent the other. When the non PPR is finally sold, can you please help me determine the allowances for CGT. Would the PPR relief on the sold home take into account the value at the date of marriage?

Hi
HMRC cannot coment on future events as legislation may change. Based on current guidance the value at date of marriage is irrelvant for PRR purposes as it is the gain and the number of months you lived in the property that are taken into account.

Thanks. Can you advise 1. when the gain us calculated from and 2 how the number if months you lived in the property is taken into account please. This isn't clear from your answer. Thanks for your help.

Hi,
Please refer to guidance at:
Tax when you sell property
Thankyou.

I have referred to the guidance which is still unclear to me, on this very vital point, so I have phrased the issue below: If the following apply: 1. My partner and I are Civilly Partnered 2. We both own our own houses which we owned since 1987, and lived in continuously before our civil partnership and continue to live in after our CP 3. We nominate one property as our principal residence, within 2 years, as the current tax law requires Then, the house which is not named as the principal property, but is lived in by one partner is sold, A. Will CGT be payable, according to current tax legislation? B. From what date ...date of purchase ie 1987, date of CP or other date C. If any relief is applied, exactly how would this be calculated. An example would be really helpful Finally, can the CGTcalculator be use to model a hypothetical case or is it only to be used to calculate actual liability in a real life situation? The guidance on this set of circumstances is too general to enable me to get any clarity. Thanks for your help

Hi Sue Warner,
The date of purchase is used when calculating capital gains arsising from the disposal.
You are free to play about with the capital gains calculator, as much as you would like.
It does not record any of your actions or send any information entered into the calculator to anyone.
You can save the results of a calculation to your computer, to keep as part of your records.
Capital gain tax will be calculated using figure that show your percentage of ownership of the asset.
Being married or in a civil partnership at the time of disposal would give you the option to split the share of the property 50:50, otherwise the split is in beneficial ownership only.
Thank you.