Help with Mesher Order
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Netts71
Posts: 10 Forumite
Hi, my husband divorced his ex-wife about 9 years ago. He wanted a clean break agreement but as they had 2 children together & his ex was only working part-time the house was transferred into her sole name & a Mesher order was put in place with the usual triggers.
In Sept last year one of the trigger factors was reached (youngest over 18 & left full time education). My husband has contacted his ex several times asking what her plans are to release his 35% share, after a few weeks she replied that she would need to sell the property.
To date (6 months since the trigger factors were reached) nothing has moved forward. The ex hasn't put the property on the market & is now ignoring his texts/letters asking for updates.
He's not sure of his rights (or even if he has any) to ensure the matter is resolved! Any suggestions/help gratefully received!
Also, could anyone tell us if he would be liable to tax on his share - I've read lots of complicated & conflicting advise from various different websites... feeling a bit lost with it all!!
Many thanks
In Sept last year one of the trigger factors was reached (youngest over 18 & left full time education). My husband has contacted his ex several times asking what her plans are to release his 35% share, after a few weeks she replied that she would need to sell the property.
To date (6 months since the trigger factors were reached) nothing has moved forward. The ex hasn't put the property on the market & is now ignoring his texts/letters asking for updates.
He's not sure of his rights (or even if he has any) to ensure the matter is resolved! Any suggestions/help gratefully received!
Also, could anyone tell us if he would be liable to tax on his share - I've read lots of complicated & conflicting advise from various different websites... feeling a bit lost with it all!!
Many thanks
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Comments
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Not totally sure on this but I seem to have remembered reading a similar case elsewhere where an ex had to lay capital gains tax on their share of the property when it was was sold because it was not their main residence. This seems very unjust when it's part of a divorce settlement negotiated many years previously but until enough people lobby for this particular part of taxation legislation to be changed, I think that's the way it operates.0
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I should imagine he needs to consult a solicitor about forcing ex to sell the house/release his share.
Paying CGT is mentioned in this article at the bottom
http://www.marilynstowe.co.uk/2009/03/13/mesher-order-martin-order/0 -
Thank you for your replies.
I have made enquiries with a local solicitor who advised that if things are sorted out amicably then we could be looking at around £1000-3000 costs (depending on how many letters need to be written!) but should it need to go to court to enforce the order, costs will be in the region of £6000!
I'm pretty sure (if we could find the right info/advice) that he could represent himself in court but trying to find advice is proving very difficult.
I have also read that he looses main property tax relief so will be liable for 18% tax out of his 35% share (of which the ex has never paid a penny off the mortgage!)... seems so unfair that the non resident parent not only has to rehouse himself without any capital from the marital home, waits 8+ years for the matter to be resolved and then gets stung by the tax man!!0 -
Have you read up on CGT?
There is an annual tax-free allowance (currently £11,100); taper relief no longer exists but there are some alternatives
http://www.taxcafe.co.uk/resources/capital-gains-tax-taper-relief.html
Does your husband have a copy of the Financial Order that was agreed as part of his divorce, does he fully understand it?
Has he been paying the mortgage on the ex-wife's residence for the last 9 years?The questions that get the best answers are the questions that give most detail....0 -
Netts71 wrote:I'm pretty sure (if we could find the right info/advice) that he could represent himself in court but trying to find advice is proving very difficult.
If he's able to represent himself in court then what does he needs advice for?
Either he has the necessary expertise to represent himself, in which case he doesn't need advice, or he doesn't in which case he needs to pay a solicitor for their advice.I have also read that he looses main property tax relief so will be liable for 18% tax out of his 35% share (of which the ex has never paid a penny off the mortgage!)... seems so unfair that the non resident parent not only has to rehouse himself without any capital from the marital home, waits 8+ years for the matter to be resolved and then gets stung by the tax man!!
How is it unfair? Most people think that if anything is unfair it is that primary residences are exempt from taxation - and the "unearned" money you get from their increasing value. (I don't, by the way.) How would it be fair if those who got divorced could enjoy two lots of primary residence exemption - on the house their ex-spouse lives in and the house they bought and lived in after divorcing?
He should be able to claim primary residential relief for the period he was living in the house. E.g. if he was living in the house for five years, then got divorced and lived somewhere else for five years, and then the house is sold, he will be liable to capital gains tax on half of the growth.0 -
It is unfair because people in the situation of OP husband has no control over an investment that they would otherwise have disposed of.
Not only he had no choice at the time but is now finding that he will likely have to pay cost to enact a court order already agreed. The cost of if should be borne by the person who is preventing the judgement action.
The ex had the chance to remain in a property on the principle that it was for the benefice of the children. There is no such need any longer and she shouldn't be able to get away with delaying the sale without penalty.0 -
Thank you FBaby - couldn't have put it better myself!!
Malthusain - having helped a friend to self represent in court during a divorce (which went to Final Hearing) I believe that it is possible to avoid the unnecessary cost of solicitors in most circumstances.
Surely forums like this are a way of expanding knowledge, sharing experiences and offering guidance?0 -
He can certainly ask for that. He might benefit from legal advice on that one. Is it possible that one solicitor's letter would 'encourage' his ex-wife to move forward?Not only he had no choice at the time but is now finding that he will likely have to pay cost to enact a court order already agreed. The cost of if should be borne by the person who is preventing the judgement action.Signature removed for peace of mind0 -
It is unfair because people in the situation of OP husband has no control over an investment that they would otherwise have disposed of.
Not only he had no choice at the time but is now finding that he will likely have to pay cost to enact a court order already agreed. The cost of if should be borne by the person who is preventing the judgement action.
By not disposing of it he has made a capital gain on it. Capital gains are subject to tax, whether it's a business you own and control 100%, a share of a publicly listed company or even an investment over whether you have no control. If you are living in the house you are exempt under primary residence relief but that doesn't apply here - or rather, it probably does apply but only to the portion of time that he was living in it.
It would hardly be fair if the OP's husband benefited from tax-free growth on two houses simultaneously - the one he used to live in and the one he's living in now. If he rented after divorcing, that's not the taxpayer's fault.
You cannot conflate the cost of taking court action against the ex with the tax that is due on his "windfall" from rising property prices. They are completely separate.
I agree entirely that the ex should bear the cost of her intransigence, and hopefully the courts will award the OP's husband's costs, if it comes to that.
If he can't be awarded costs and if the costs of court action plus the capital gains tax wipe out the money he makes from selling the house then that will be very annoying, and unjust. But the OP hasn't said that that is the case.Netts71 wrote:Malthusain - having helped a friend to self represent in court during a divorce (which went to Final Hearing) I believe that it is possible to avoid the unnecessary cost of solicitors in most circumstances.
Surely forums like this are a way of expanding knowledge, sharing experiences and offering guidance?
Yes. Knowledge from random people in the pub. You have no idea whether what we are saying is correct or relevant and no comeback if we get it wrong. If you have the necessary knowledge to represent yourself then absolutely you should go ahead. If you don't, you stand to lose much more than a solicitor would have charged you. As with any DIY-v-professional job it's your choice.
How much is the house worth?0 -
How come he only gets 35% and not 50% having paid the mortgage himself?What's yours is mine and what's mine is mine..0
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