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HMRC internal manual

Capital Gains Manual

Private residence relief: separation, divorce or dissolution of civil partnership: transfer following divorce or following the dissolution of a civil partnership

Where a husband and wife are divorced or where a civil partnership is dissolved, you may normally accept that a subsequent sale of an interest in the property by one former spouse or civil partner to the other is a transaction at arms length. If exceptionally, the sale price seems to differ substantially from the expected market value, this may be indicative of a bargain not at arms length but it should be borne in mind that the open market value in these circumstances would have to take account of the rights of occupation of the spouse or civil partner residing in the house. In cases of doubt you may consult the Valuation Office Agency but you should present all the facts so that the valuation can be made on the correct basis.