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HMRC internal manual

Capital Gains Manual

Private residence relief: extended ownership period: transfer between husband and wife or between civil partners

You should extend the transferee’s period of ownership of the residence to take in the period of ownership of the transferor, see CG64950. Additionally you should allow relief to the transferee for any part of the extended period of ownership in which the property was the only or main residence of the transferor. An example is given at CG64955.

In some circumstances the extension of the period of ownership will not be to the advantage of the transferee. For example, a residence passes from wife to husband on her death. Following her death the widower occupies the residence as his only residence until he sells it. Before his wife died the property was only used as the couple’s only or main residence for part of her period of ownership. If we looked only at the use of the residence during the widower’s period of ownership there would be no restriction of relief. But extending the period of ownership brings into the computation of relief a period when the residence was not the only or main residence of his former wife. In these circumstances relief must be restricted.