Q a married couple own two properties, one property is in…

I'm afraid there is not a straightforward answer here.

As the election to treat one of the two properties as their main residence was not made, should the disposal of the English property come to the attention of the tax office whether CGT will be charged will be determined by the facts of the case, ie where they spent most of their time. Many couples do not report the sale of what they consider to be their primary residence because they don't complete annual tax returns so the Revenue never get to ask the questions. If the husband has spent most of his time in the English property then I would say that based on that fact his half of any capital gain will be exempt by reason of the English property being his primary residence.

As the wife appears to have spent more time in the Scottish property for work reasons it will be a little more difficult to claim that the English property is the main residence though I would argue that the Scottish property was bought out of necessity due to her job being in Scotland. Details such as council tax records and voter registration could have significance here. Having said that, the couple aren't separated for any other reason than by work locations so it would seem harsh to me to penalise the wife by means of CGT for that reason alone. The couple may be able to argue that the English property is the main marital home.

If, as you say, the couple have split their time more or less equally between the two properties then it may be a matter of doing the arithmetic as to where they each stayed and when. I did say there was no easy answer to this.

My inclination would be to claim the principle private residence exemption for both the husband and wife and see what happens as far as the Revenue are concerned. If the Revenue argued that the PPR exemption was not fully available to the wife then a fall back would be to claim relief for the last 36 months as exempt in any event.

What you need to remember is that if you successfully claim that the English property was the main residence for both spouses then should the Scottish property be sold the gain for the first seven years of ownership as a proportion of the gain for the overall period of ownership will be potentially chargeable to CGT. This may be academic if they intend to spend their retirement there.

You might also consider transferring the wife's half of the English property into the husband's name before selling it to avoid the problem altogether but this may be challenged by the Revenue.

I can only give you some pointers for consideration here as I don't have access to the all the facts of the case so I would recommend that the couple go to see a local accountant if they don't have one already who can look at their situation in more depth with a view to formulating a strategy to avoid completely or minimise the tax exposure on a sale of the English property.

You can find some additional useful information here but I would still recommend that further advice is sought before making any decisions as regards XXXXX XXXXX English property.

These notes do actually say that a married couple can only have the same PPR but as this couple seem to have spent their time equally between the two properties and no election was made, it's still not straightforward.