Taxation of Chargeable Gains Act 1992 section 248E

Relief on disposal of joint interests in private residence

Section 248E provides a capital gains tax relief when joint owners of two or more dwelling-houses swap their interests so that each person ends up as sole owner of the property they use as their main home.

• Where two or more people jointly own interests in multiple dwelling-houses, and they exchange those interests so each ends up with a single property as their only or main residence, a special CGT relief is available on a joint claim.
• The relief treats the disposal of the relinquished interest as taking place for a consideration that produces neither a gain nor a loss, effectively deferring any CGT charge.
• The acquired interest is treated as having been acquired at the time it was originally purchased jointly, and at a cost equal to the allowable expenditure that the departing co-owner(s) would have been able to deduct on a disposal of that interest.
• The relief extends to interests held through partnerships and treats spouses or civil partners living together as a single landowner or co-owner for the purposes of the claim.