My wife bought her own house (‘house 1’), and we were very badly advised to put our 50% jointly owned house (‘house 2’ with no mortgage) totally into her name but I have continued to live in it. She then owned 2 houses (1 and 2), her own house, with house 1 being her main residence. She has now transferred the full title of house 2 to me by way of gift (no money involved, so no capital gains tax (CGT) was payable), and I continue to live there as my main residence. We are still happily married and classed as living together and I am led to believe, because I now hold the full title, that at some point in the future, if I choose to sell it, there will be no CGT payable as this is and will be my primary residence. Neither house has ever been vacant, rented or anything other than just lived in. Is this correct? 

Arthur Weller replies:  

There appears to be some mistakes in what you have written. A husband and wife who are still within the category of 'living together' (see HMRC’s Capital Gains Manual at CG22070) can only have one principal private residence, for tax purposes, between them (see CG65300). See alsoCG64525, which shows that you and your spouse must decide between you which house will be classed as 'the family principal private residence'. So, quite possibly, when your house is eventually sold, there will be CGT (by the way, the reason why there was no CGT on the transfers between you and your wife was that you are 'living together', and not because there was no money involved.)