Private Residence Relief on CGT

nichola1252

Bit of a back story...

Myself and my husband are purchasing a property, the mortgage is solely in his name. We wanted both our names on the deeds but have been told this isn’t possible as I am not on the mortgage.

I will be living in the property for two years ( he works and lives abroad) and then we will be renting it out.

Now my question is, when we come to sell the property can we claim PRR for when I lived there if I’m not on the deeds? I will be added to the deeds at a later point in the future.
Many thanks!

Jeremy535897

It is a complex area. Section 222(7) TCGA 1992 covers the situation where there is an inter-spouse transfer (as there would be when you become a joint owner), and deems your ownership to start when your husband bought the property in certain circumstances, but it would have to be his main residence at the date of transfer for that to apply. There are other rules that can treat a property as an individual's main residence even though they live abroad. See HS283:

"Certain other periods of absence from your dwelling house may be treated as periods of residence if both before and after the period there’s a time when the dwelling house is your only or main residence.

If you’ve another dwelling house eligible for relief, for example a house or flat which you bought or rented as your home while absent, you’ll need to make a nomination in favour of the original dwelling house, if you want the period of absence to be treated as a period when that house was your main residence, see ‘Only or main residence’ above.

The qualifying periods of absence are:

a. absences for whatever reason, totalling not more than 3 years in all

b. absences during which you’re in employment and all your duties are carried on outside the UK

c. those totalling not more than 4 years when either

• the distance from your place of work prevents you living at home
• your employer requires you to work away from home in order to do your job effectively

You’ll keep the exemption for absences b. and c. if you cannot return to your dwelling house afterwards because your existing job requires you to work away again. The absences at b. and c. will also apply if the employment was that of your spouse or civil partner."

From https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief-2020