Related Party Property Transactions Bright-line Test

Question

Could you confirm the following is correct:- Because property was jointly owned, then upon a relationship property transfer into one party's name, it is treated as being transferred on the same day as the original purchase and so falls outside of the bright-line test.

Answer

 The current rules provide special treatment (commonly referred to as “rollover relief”) for transfers to relationship partners, close relatives and charities (subject to certain conditions).

As you say, no tax liability arises from the relationship property transfer, which is treated as taking place on the same date that the partner or spouse originally purchased the property.

The effect of the rollover relief is to delay any tax liability until any subsequent disposal by the new owner. Therefore, any subsequent sale of the transferred property will be subject to the bright-line test.