Main residence relief and divorce

First let us look at the transfer of assets between a couple. When a legal couple (such as a married couple or a couple in a civil partnership) are living together and one makes a disposal of a chargeable asset to the other they must use the ‘no gain no loss’ method of calculating the gain.

This is set out in TCGA 1992 s 58. The only exception to this while they are happily together is if the chargeable asset forms part of the trading stock of the disponer’s business or is to be used as trading stock in the recipient’s business.

This ‘no gain no loss’ method causing no chargeable gain and allowing no chargeable loss can be a very useful tool within couples because transferring assets – at essentially the historical cost of the disponer – between them...