The spouse exemption

The Taxation of Chargeable Gains Act 1992, s. 58(1), which deems inter-spouse transfers to give rise neither to a gain nor to a loss, only applies to transfers between spouses living together (as to which see ¶50-200). It does, however, apply throughout the tax year of separation, so if a transfer is made in that tax year, there can be no taxable gains for the transferor, even if full PRR would not otherwise apply, e.g. by reason of non-privileged absences. The transferee then inherits the transferor’s base cost for the share acquired. However, such an outcome is often impossible to engineer.

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