Tax Question of the Week Divorce and Property
I moved out of the marital home a year ago into a rented property. As part of the divorce settlement, it has been agreed that I will transfer my share of the marital home to my wife once she has raised the finance to buy me out. I’m unsure how long this could take, or if we will have to put the house up for sale and therefore how this will affect my PPR claim.

A. Normal PPR relief would allow you to relieve the gain on the sale of this property, which had been your residence, for the period that you actually lived there and the last 18 months for any other reason. Depending on when your ex-wife manages to raise the finance this later period of absence may well be covered by these basic rules.

However, TCGA 1992 s225B legislates for the right to receive PPR on disposals in connection with the end of a marriage or civil partnership, where a partner ceases to live with their spouse or civil partner in what was their only or main residence. This gives you some leeway in that you can still be classed as accruing, and so make a claim for, PPR on the ex-marital home that you no longer live in due to the separation. There are no time limits given in the legislation for how long this PPR can accrue but conditions have to be met.

One of the conditions is that your disposal is part of the agreement on dissolution or annulment of the marriage or civil partnership, where separation is likely to be permanent or by order of the court.

Another condition is that your previous partner must also have this property as their only or main residence from the period that you move out to when you transfer your interest to them. This is also a key point that sometimes gets missed when the house is put up for sale and sold to a third party. To enable this claim, if you do decide to put the house on the market, you must transfer your share to your ex-wife before it is sold to a third party. Otherwise, you fail as you haven’t transferred your share to your ex-partner who is still living in the house.

The other pitfall is electing another property as your main residence in the period between moving out and transferring your interest to your ex-wife. If you buy a main residence in the interim you may fail the claim under s225B.


If you have a tax query, why not contact the Tax Advice Line on 0844 892 2470 to discuss it. Our team of experts have a wealth of experience and can also provide a written consultancy service at £180 per hour plus VAT.

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Tax Adviser
0844 892 2470


Suzanne has been working in small practices since 2003 where she has gained a wealth of tax experience relating to smaller, owner managed businesses, buy to let landlords and individuals. Previously working in a small team, Suzanne has developed a good knowledge of all aspects of general tax, in particular income tax, VAT, corporate tax and PAYE.

Suzanne is a member of the Association of Accounting Technicians and Association of Chartered Certified Accountants.

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