2 properties and CGT

nellis10

Hi!

This is the situation.

I am married, but currently separated since April 2006. I live in a small property that was bought Nov 2005 jointly with my mum (both names on the deeds). It was bought whilst my DH and I were still together. I ahve just signed on the electoral register for this property and consider it my main home.

However my DH and I own a large property (bought June 2004), only his name are on the deeds. Only he is registered this year on the electoral register at this property (which will now only be signed every 10 years unless there is a change).

Anyway, DH and I intend to get back in the near future (2007 sometime) as we are working through are differences. The small house has gone up 50% since Nov 2005 and obviously would now be liable for CGT. If I am now the owner/occupier of the property, am I liable for CGT if me and mum sell it in 4yrs.

I remember when I sold my apartment to move in with DH I was not laible as it was my residence and was being pumped into a new property...partly DH house and partly this little house.

Can someone advise me on CGT and my occupancy of the house? I am not trying to defraud the taxman, but if there is a way legitamately (sp?) that i do not need to pay CGT then it would help me enormously. also if I am not liable, then if my mum is only helping me afford the house is she liable too?
Thanks!

seven-day-weekend

If you sell your main home (whichever one it is) you will not be eligible for CGT.

So, it seems to me that if you sell the small house now, that you share with your mum (assuming you live there now) that will not be liable for CGT because it is your main home.

If your husband sells the house that is in his name now (assuming he lives there), then that will not be liable for CGT as it is HIS main home.

I think if you move out of your main home, you have to sell it within three years for it not to be liable for CGT.

Hope I have understood your circumstances correctly.

nellis10

seven-day-weekend wrote:

If you sell your main home (whichever one it is) you will not be eligible for CGT.

So, it seems to me that if you sell the small house now, that you share with your mum (assuming you live there now) that will not be liable for CGT because it is your main home.

If your husband sells the house that is in his name now (assuming he lives there), then that will not be liable for CGT as it is HIS main home.

I think if you move out of your main home, you have to sell it within three years for it not to be liable for CGT.

Hope I have understood your circumstances correctly.

We have 4 years left on our little house...which is my main home at the moment. We intend to sell it then. Thus I should stay in it until end of 2007 to be sure. Do I tell the taxman...that this is my main home, just to be sure?

Mrs_pbradley936

I think you are worrying unnecessarily because the house owned with you and mum means that you would only have half of any gain and you have an allowance of £8,800 each anyway. Plus at the moment it really is your main home.

nellis10

pbradley936 wrote:

I think you are worrying unnecessarily because the house owned with you and mum means that you would only have half of any gain and you have an allowance of £8,800 each anyway. Plus at the moment it really is your main home.

It's already got a gain of £40K in 8 months, in 4 years it could ahve a gain of £70-80K!

If I was to keep it as my main residence for 4 years, and have the deeds put into my own name, my mum would not be laible would she as she no longer has an interest in the property. On selling I could then give her a portion of the profits without either of us being liable?