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Only or main residence relief and divorce after the OTS’s second CGT report

22 June 2021 / Marilyn McKeever
Issue: 4797 / Categories: Comment & Analysis
For the few, not for the many

Key points

  • The OTS considers that only or main residence relief is generally fit for purpose.
  • Start date of period of ownership should be amended to help people who build and live in a home on land they occupied for many years.
  • Raise awareness of when to nominate which is the main home when more than one is owned.
  • Time limit for divorcing couples to transfer assets between themselves at no gain/no loss should be extended.
  • Main residence relief should be extended to a non-occupying joint owner divorced spouse where the other ex-spouse remains in occupation.

Capital gains tax is not a big revenue-raiser. In the 2019-20 tax year it raised £9.8bn an embarrassingly small amount compared with the £339bn raised by income tax and National Insurance. It is however a complicated tax.

The first report of the Office of Tax Simplification (OTS) on capital...

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