selling house after split and capital gains

floozie_2

I'm hoping someone can help me.

I moved out of the house I own jointly with my husband four years ago. The mortgage term ended 2 months ago, so the house is now mortgage free, and worth £150,000

Last November I bought a house with my new partner, with a mortgage.

My ex now wants to sell our jointly owned house, split the proceeds 50/50 I intend to use all my share of the proceeds to reduce the mortgage on my new house.

My question is,
will my ex and/or I be liable to pay capital gains tax on the proceeds of the house sale?

I hope this makes sense, many thanks!!

00ec25

yes you are liable because it is more than 18 months since you lived in it as your main home

how much you will have to pay depends, but it is unlikely to be much if anything, if you want an answer provide details of :
- date of purchase
- purchase cost
- assume joint ownership (50/50) with ex
- date you moved out
- anticipated sales price

floozie_2

Thanks for prompt reply.

house was purchased under right to buy in 1989.
We paid £24,200.00
50/50 split
I moved out july 2010
sold stc for £148,500.00

00ec25

floozie wrote: »

house was purchased under right to buy in 1989.
We paid £24,200.00
50/50 split
I moved out july 2010
sold stc for £148,500.00

the real calculation of periods must be done in number of months , but I'll use years in this illustration:

total ownership period 1989 to 2014 = 25 years
period lived in as marital home 1989 to 2010 = 21 years
Private Residence Relief (PRR) period : actual occupation + last 18 months (ie 1.5 years) of ownership (if not actually living in it at that time) so PRR = 21 + 1.5 = 22.5 years

gross gain: 148,500 - 24,200 = 124,300
you can also deduct your share of any buying and selling costs (eg EA and legal fees) but I'll exclude adjusting for such fees for sake of simplicity, so your share of the gain (50%) is 62,150

PRR (exemption): 62,150 x (22.5/25) = 55,935

net taxable gain: 62,150 - 55,935 - 11,000 (personal allowance @14/15 rate) = ZERO

your taxable gain is fully covered by relief and allowance meaning you have nothing to pay and, because of that, you do not have to declare the calculation to HMRC unless you are already required to complete a tax return, in which latter case you must declare the calculation.

Mathematically you still have £4,785 of your personal allowance remaining for 14/15 in case you make any further CGT liable disposals and need to cover them with the unused residue of your allowance

(BTW for your ex, as he has always lived there, his position is PPR = 25 years so he is totally exempt and does not need to use his personal allowance at all)

floozie_2

Thank you so much for such a detailed and informative reply.
Very much appreciated!!