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09 October 2000
Our client acquired a property in his sole name in November 1955 (cost circa £1,000). The residence was the sole family home for our client and his family until 1966, at which time the family moved house. The original house was retained and let out. No principal private residence elections were made. In December 1968 our client transferred ownership of the house to joint names with his wife. The transfer was registered as of being less than £5,500 in value. No actual consideration passed between the spouses.
Our client acquired a property in his sole name in November 1955 (cost circa £1,000). The residence was the sole family home for our client and his family until 1966, at which time the family moved house. The original house was retained and let out. No principal private residence elections were made. In December 1968 our client transferred ownership of the house to joint names with his wife. The transfer was registered as of being less than £5,500 in value. No actual consideration passed between the spouses. Our client's wife passed away in November 1990 and left her 50 per cent interest in the property to our client (entire property valued at £180,000). The property was sold in November 1997 by our client for £290,000. The property was let from 1966 to the date of disposal, inclusive, and was not occupied by our client, his wife or any relatives during that time. The rental income was declared to the Revenue in our client's sole name for the entire period of letting. A March 1982 election has been made (entire property value £58,000). We believe our client is entitled to:
(a) Principal private residence relief in respect of the last three years of ownership.
(b) Lettings relief restricted by (a).
(c) A base cost of the property for capital gains tax purposes equal to 50 per cent of the March 1982 value plus 50 per cent of the entire property value in November 1990 when our client 'reacquired' that half from his wife's estate.
Do readers agree, and what would their capital gains tax computation be?
(Query T15,700) Sydney.
(a) Principal private residence relief in respect of the last three years of ownership.
(b) Lettings relief restricted by (a).
(c) A base cost of the property for capital gains tax purposes equal to 50 per cent of the March 1982 value plus 50 per cent of the entire property value in November 1990 when our client 'reacquired' that half from his wife's estate.
Do readers agree, and what would their capital gains tax computation be?
(Query T15,700) Sydney.
