Capital gains tax on divorce settlement

WENDY.B_2

I am currently in the middle of a divorce and as part of the settlement I am due to transfer our marital home which is in my soul name to my estranged husband.

The other property we own is currently rented out and will be given to myself as part of the divorce settlement. This property is also in my soul name already.

We lived at the rented out property from purchase then rented it out for a few years, moved back in, then rented it out again to the current tenant who has been there for a year and a half now after we bought our marital home.

Will I have to pay Capital Gains Tax if I sell the rented property?

I have moved out of the marital home and I'm currently living in a rented house owned by someone else at present.

Also if I moved back into our rented out property would I be liable to pay Capital Gains Tax when I eventually sold it?

Will I have to pay Capital Gains Tax on my marital home once it is transfered and if my husband sell it?

The rental house cost £23,000 and is due to be sold for £85,000.

If I do have to pay Capital Gains Tax how much do you estimate it would be?

CLAPTON

in principle yes you may be liable to cgt but as it was your home for a while you have several allowances.. principal private residents relief, the last 3 years, letting relief and your cgt allowance of 10,100

so if you would like to give the dates that you actually lived there (year and month) and the letting periods then it would be possible to see whether you would have any cgt to pay.

WENDY.B_2

rented out property:-

Lived there 10/1994 - 10/2000
Rented out 10/2000 - 10/2006
Lived there 10/2006 - 07/2009
Rented out 08/2009 - todate

Marial Home:-

Lived there 08/2009 - 05/2010

If I moved back into the rented property then sold it at a later date would I still pay CGT?

CLAPTON

well it works like this

say you sell in april
gross profit is 85k-23k less buy/sell costs (say 2k ) so profit is 60k

period of ownership is 198 months
period you lived there is 105 plus you are allowed the last 3 years so can add the whole period from 7/2009 i.e. total of 126 months

so PPR (principal private residence ) relief is 60000 x 126/198 = 38,181
plus you get letting relief ... lesser of letting period, PPR or 40,000 so that's 60,000 x 72 /198 = 21,818

so total relief is 60,000 so no tax payable
and of course you are also entitled to 10,100 cgt relief anyway

so even if you keep it for a few more years its unlikely you will be liable to any tax

basically if you actually live in a property for a reasonable time and then let it for a few years the cgt tax is likely to be zero or very low due to the reliefs