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    • Netts71
    • By Netts71 12th Mar 17, 1:49 PM
    • 10Posts
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    Netts71
    Help with Mesher Order
    • #1
    • 12th Mar 17, 1:49 PM
    Help with Mesher Order 12th Mar 17 at 1:49 PM
    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
Page 1
    • Primrose
    • By Primrose 12th Mar 17, 5:28 PM
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    Primrose
    • #2
    • 12th Mar 17, 5:28 PM
    • #2
    • 12th Mar 17, 5:28 PM
    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.
    Last edited by Primrose; 12-03-2017 at 5:31 PM.
    • Spendless
    • By Spendless 12th Mar 17, 5:51 PM
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    Spendless
    • #3
    • 12th Mar 17, 5:51 PM
    • #3
    • 12th Mar 17, 5:51 PM
    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/
    • Netts71
    • By Netts71 12th Mar 17, 7:03 PM
    • 10 Posts
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    Netts71
    • #4
    • 12th Mar 17, 7:03 PM
    • #4
    • 12th Mar 17, 7:03 PM
    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!!
    • mgdavid
    • By mgdavid 13th Mar 17, 12:31 AM
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    mgdavid
    • #5
    • 13th Mar 17, 12:31 AM
    • #5
    • 13th Mar 17, 12:31 AM
    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?
    Last edited by mgdavid; 13-03-2017 at 12:35 AM.
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    • Malthusian
    • By Malthusian 13th Mar 17, 12:14 PM
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    Malthusian
    • #6
    • 13th Mar 17, 12:14 PM
    • #6
    • 13th Mar 17, 12:14 PM
    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.
    by Netts71
    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.
    • FBaby
    • By FBaby 13th Mar 17, 1:17 PM
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    FBaby
    • #7
    • 13th Mar 17, 1:17 PM
    • #7
    • 13th Mar 17, 1:17 PM
    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.
    • Netts71
    • By Netts71 13th Mar 17, 7:20 PM
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    Netts71
    • #8
    • 13th Mar 17, 7:20 PM
    • #8
    • 13th Mar 17, 7:20 PM
    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?
    • Savvy_Sue
    • By Savvy_Sue 14th Mar 17, 1:28 AM
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    Savvy_Sue
    • #9
    • 14th Mar 17, 1:28 AM
    • #9
    • 14th Mar 17, 1:28 AM
    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.
    Originally posted by FBaby
    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?
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    • Malthusian
    • By Malthusian 14th Mar 17, 11:05 AM
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    Malthusian
    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.
    Originally posted by FBaby
    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.

    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?
    by Netts71
    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?
    • neneromanova
    • By neneromanova 14th Mar 17, 11:27 AM
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    neneromanova
    How come he only gets 35% and not 50% having paid the mortgage himself?
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    Got Married 15th September 2012 Now Mrs Clark


    • justme111
    • By justme111 14th Mar 17, 12:05 PM
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    justme111
    I think there is a misunderstanding here. He will pay tax not on the proceedings of the house sale but on the increase of its value beyond CGT allowance if I am not mistaken which would result in far lower number to be paid to what op thinks it should be.
    • TBagpuss
    • By TBagpuss 14th Mar 17, 12:38 PM
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    TBagpuss
    He will be able to apply to the court to enforce the original order. If his ex is deliberately refusing to take steps toconply with the order he may be ableto claim back (some of) the costs of doing so from her.

    He shoukld alos check the woding of the order. Some include provisions that the person occupying the house has to pay occupation rent or interest for periods after a trigger point is reached until the money is paid.

    A solicitor's ;letter setting out what she needs to do may be the first step.
    • FBaby
    • By FBaby 14th Mar 17, 5:35 PM
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    FBaby
    By not disposing of it he has made a capital gain on it
    We don't know that. It might very well be that the agreement was that he would be entitled to 50% of the equity up the time of the divorce but nothing afterwards if she took on the full payment, so would have had no capital gain from not disposing at the time.

    It might be that the 35% is the reason for this, or it might be that the agreement is she is entitled to 100% of the equity gained after the divorce if she paid fully (and rightly so), but still only 35% of the equity of to that stage.
    • mgdavid
    • By mgdavid 14th Mar 17, 11:55 PM
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    mgdavid
    We don't know that. It might very well be that the agreement was that he would be entitled to 50% of the equity up the time of the divorce but nothing afterwards if she took on the full payment, so would have had no capital gain from not disposing at the time.

    It might be that the 35% is the reason for this, or it might be that the agreement is she is entitled to 100% of the equity gained after the divorce if she paid fully (and rightly so), but still only 35% of the equity of to that stage.
    Originally posted by FBaby
    Agree completely, which is why I asked about the Financial Order back in post 5 but the OP seems to have chosen to ignore the question. Can't be definitive without the detail.
    Last edited by mgdavid; 15-03-2017 at 12:04 AM.
    A salary slave no more.....
    • FBaby
    • By FBaby 15th Mar 17, 7:05 AM
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    FBaby
    Indeed, you asked this question and it is essential. Out of curiosity, if indeed he could show that he hasn't contributed at all towards the mortgage in the last 9 years, is it the case that he wouldn't have to pay CGT on the equity for that period? Is it straight forward, or would he need to show the court order and evidence that he hasn't paid anything during that period?
    • mgdavid
    • By mgdavid 15th Mar 17, 12:04 PM
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    mgdavid
    that would best be a question for HMRC, I've not personally been in this situation.
    A salary slave no more.....
    • Netts71
    • By Netts71 15th Mar 17, 7:04 PM
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    Netts71
    Thank you for the continuing posts.

    Sorry mgdavid for failing to reply to your question sooner...

    As I understand it, husband & ex split up in 2003 - divorce was finalised in 2008 (husband moved out in 2003 but continued paying 100% of mortgage plus bills during this period).
    At time of divorce property was valued at £180000, outstanding mortgage of £64000.
    Property was signed over to ex & mortgage was switched to interest only from this point in her sole name (as husband no longer owns property), so has been paying around £230 per month to remain in the former marital home.
    Court order is simply the house is to be sold upon trigger factors (the one reached being youngest over 18 & left full time education), mortgage is to be paid off (£64000) and equity to be split on a 65/35 basis in favour of the ex (due to her having restricted career options as primary carer of the children).
    We don't know what the property is worth today as ex hasn't got an estate agent around yet but similar properties in the area are selling for around £300000.

    If I've missed any relevant details then please let me know & I'll try to answer!
    • FBaby
    • By FBaby 15th Mar 17, 8:24 PM
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    FBaby
    Are you saying that he is entitled to 35% of the full equity, even though she's the one whose paid the interest on the house for 8 years, when she was the only owner of the property during that time? That is odd, but then maybe it explains the 35/65 divide.
    • Netts71
    • By Netts71 15th Mar 17, 8:38 PM
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    Netts71
    I believe so... I'll try & dig out the court order tomorrow to check the wording.
    Thank you!!
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