Main residence relief

As far as I read the relevant provisions, incl S222(6) CGTA, where husband and wife are ‘living together’ i. e in this case not legally or permanently separated or divorced, then, as they only get one main residence relief between them , this applies to a case where one spouse is in a nursing home but the other remains in the house ie at least one of them has occupied at all times and they are still treated as ‘living together ‘ for the purposes of this relief There is, of course, a special provision which extends the 9 months non occupation before sale to 3 years for a person having to move to a nursing home etc but I assume that is additional relief for a single person eg a widow, who ceases to occupy the home. Where however, one spouse does continue to live there, I understand that the full relief is available and continues to run for both spouses eg their jointly held interests, even though one is in a nursing home
I cannot find anything specific on this point so wonder if this view is correct or is there a different approach to this ?
Michael Jepson
MJ Consultants

Does not TCGA 1992 s225E(3) confirm that the 36. months relief applies to both the individual occupying the home and the spouse of such individual who is in the care home?

Malcolm Finney

Checking this further, it would appear that relief under S223(1) applies to each spouse individually, even though they can only have one main residence between them. Thus the test applies separately to each spouse’s share if they own jointly. On that basis, the spouse who remains in occupation gets full relief under s223(1) and the spouse in the nursing home gets the extended s223(1) absence relief under s225E but is otherwise subject to CGT on that share for any period of absence after the 36 months.

If that situation might arise, then a gift of the absent spouse’s share to the other spouse within the 36 months would keep the full relief running thereafter This is particularly relevant if the absent spouse owns the whole of the property where S225E otherwise only extends the period by 36 months

Michael Jepson
M J Consultants

Michael I’m not sure I agree. S 225E(3) I believe extends the relief to the spouse of the individual in the care home. If it doesn’t then I’m not sure what the point of the subsection is.

Malcolm Finney

I agree, but in my view, all it does is to extend the 9 months from that person ceasing to
occupy to 36 months per S225E (4)
Michael Jepson

TCGA 1992 s 225E (introduced by FA 2014) is purely designed to retain the deemed period of ownership as a residence to include the last 36 months of ownership [s223(1)] both for the individual in the care home and the spouse of that individual on a disposal ie the reductions first to 18 months (FA 2014) then down to 9 months (FA 2020) do not apply to such individuals.

The normal CGT computation rules otherwise apply.

Malcolm Finney