New queries, issue 4657

Home sweet home

Capital gains tax position for tenants-in-common.

My client bought a bungalow with her late husband. Contracts exchanged in October 2009 and they moved in January 2010.

The couple owned the property as tenants-in-common and she inherited his half share when he died in April 2010. The bungalow’s value was estimated as in effect equal to cost for probate purposes because it made no difference for inheritance tax.

My client remarried in January 2012 and moved into her new husband’s home.

The bungalow was eventually sold in July 2018. The computation of the gain seems a bit fiddly. My guess is that gains have to be computed separately on the two halves of the house and an exempt proportion calculated separately for each (because her date of ownership is different).

I am also not clear about the consequence of the three months...