capital gains tax on half share of house

jockettuk

ex hubby buying me out of the marital home. ive lived there for the five yrs we split and divorced. we have a child and he buying my share for £60,000. question is will he be liable for any capital gains tax and if so how much.. will check this out legally but just wondering if anyone on here in the meantime got any answers..

Thanks

Rose

Bossyboots

Here is a link to the hmrc leaflet that explains the position http://www.hmrc.gov.uk/helpsheets/ir281.pdf

HGLTsuperstar

CGT is payed on selling the property not buying it. If after he buys you out, its his main residence then he wont pay CGT when he sells it on.

jockettuk

so does this mean i pay dont pay CGT as im selling my half to him.. This has been my main residence.

HGLTsuperstar

Exactly right.

Bossyboots

jockettuk wrote:

so does this mean i pay dont pay CGT as im selling my half to him.. This has been my main residence.

If you look at the leaflet I linked to, it gives you the option of retaining the marital home as your main residence and thus avoiding the CGT. However, this means that the home you currently have (if you own it) cannot be used as your main residence for the years on which you claim it for the marital home. This would mean that if you moved within the next few years you would end up paying CGT on your current property. It may be worth doing some sums and seeing which would be cheapest, unless you are certain you will not be moving from your current property for the foreseeable future.

jockettuk

thanks.. looked at the leaflet.. im selling up because im moving out of the area to be with my partner. ive lived in the marital home for 6 yrs (when i move) with my daughter. ex always had a half share. He is now buying me out of my share for £60,000 which is a fair deal and it was all going to go through when his solicitor who is a pratt by the way stopped it because he might be liable for CGT. I dont want to keep the house so it wont be my main residence or anything else once sold to him... if he wants to keep it as his main residence then wont be liable is what im understanding as i know he doesnt want to sell it, thats why he buying me out. but if he did rent it out then he will be liable for CGT if he sold it in the future..

glad you lot on board .. i am seeking legal advice on this my solicitor checking it out ..

Thanks again

Ems!

jockettuk wrote:

but if he did rent it out then he will be liable for CGT if he sold it in the future..

I think that as well as the principal private residence relief that everyone has been mentioning, there is also a letting relief available in some circumstances ( it may be either /or, so if you use one relief you can't use the other), what I am getting at is that even if he rents it out he may be liable for CGT. I don't know all the details on this but at least it is something you can look up if need be.

Bossyboots

The only CGT issue arises for the party that has left the home. The person in the home still has it as their PPR so no CGT applies at the point of transfer to sole name and in any event, they are buying the property at this stage so it is not relevant anyway.

What the party remaining in the home does with it later is up to them but like everyone else, if it ceases to become their principal residence it will attract CGT subject to the various allowances that can be used to offset the gains. If they sell while it is still their PPR then CGT does not apply anyway. I cannot see that what he might decide to do in the future has any bearing at all on finalising the completion of transfer of the matrimonial home.