A married couple or civil partnership are only allowed a single PPR [s222(6)] and any election under s222(5) must be made jointly. However, this does not apply to unmarried couples.
Opportunity
If an unmarried couple own two residences then maximum relief can be obtained by each owning one property outright rather than owning the two properties jointly. However, it is advisable that each person make a s222(5) election in favour of the property they own. This is because both properties might be considered residences for both of them, even though they each do not own one property. It might be argued that each party only has a gratuitous licence to occupy the property they don’t own [see CG64470] but it is unsafe to rely on this particularly if both parties contribute to the upkeep of both properties. ESC D21 provides an extended time limit to make an election where a person is not aware of the need to make one and he only has a negligible interest in one property but, again, it is unsafe to rely on this.
(This posting is an extract from Graham Buckell's publication "CGT - PPR Relief" that will form part of the Landmark Tax Options service - to see a full list of the Tax Options planning articles and make a no obligation advance order, click on the title of this posting)
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