divorceand capital gains

savinglikemad

Hi - looking for advice - Back ground - Oct 14 I requested my husband to give me space as I felt our marriage of 35 years was on the rocks as his behaviour had become aggressive and erratic towards myself, he ended up in a mental institution for several weeks and then start of December he requested I move of our marital home, the police advised this also. Jan 15 he sought a solicitor and requested a divorce. Feb he had a new partner - We have agreed via his solicitor and myself the split of our monies and assets. I have nine properties that we rent out that are all in my name all with mortgages, we have a agreed a split I retain one block of flats he retains some houses - I have agreed to pay him fifteen thousand pounds so the income from my share is equal to his rental share over fifteen years -We have both agreed the properties are not to be sold in either of our life times, but to be kept in trust for our children who are all grown up - therefore equity is irrelevant, however he needs the mortgages to be transferred to his name as I am refusing to keep mortgages going in my name as if he defaults I would be liable. I need to know is Capital gains tax payable on this transfer? Niether of us have lived in the houses, and no money will change hands for the transfer, he will either pay off the mortgages as they stand or pay them off - our prime residence is being sold and the equity is being split 50/50 advice please

saintalan

I read it that you are talking about the morgage transfer so apologies if I misread it.

The mortgages are not involved in CGT. When payable it'll be the Sale - Purchase price less allowances.

Interest will have and continue to be allowable expenses in the declared rental income.

I am not sure what other factors are involved re the transfer of properties in your situation but sure others will be along to assist.

Hope it helps until others respond, so may be wise to clarify first.

Good luck

Alan

TBagpuss

CGT is likely to be be payable, as the transfer will be in a different tax year to the year in which you separated. You will need to speak to your accountant about what the CGT liability may be, and that can then be factored into any settlement you come to with your husband.

you might find this helpful -https://www.gov.uk/government/publications/husband-and-wife-civil-partners-divorce-dissolution-and-separation-hs281-self-assessment-helpsheet

booksurr

saintalan wrote: »

I read it that you are talking about the morgage transfer so apologies if I misread it.

The mortgages are not involved in CGT.

not true. There are very specific rules regarding transfer of mortgages between separated couples both before and after a divorce as per the helpsheet linked by Tbagpuss.

savinglikemad

Hi can you please point me in the right direction to the link please. Also I can't understand how we are supposed to separate and sort everything in same tax year. When I was asked to leave in December I did not anticipate us divorcing. He instructed a solicitor in jan but I did not think it was anything more than his illness and paranoid behaviour creating a problem. we had started to try and sort finances in jan. but due to the complexity it has taken til now to establish what split is fair. But supposing we had split the 4th April it would have been totally unfeasable to manage.

booksurr

savinglikemad wrote: »

Hi can you please point me in the right direction to the link please.

http://www.hmrc.gov.uk/manuals/cgmanual/CG22400+.htm

savinglikemad wrote: »

Also I can't understand how we are supposed to separate and sort everything in same tax year. When I was asked to leave in December I did not anticipate us divorcing. He instructed a solicitor in jan but I did not think it was anything more than his illness and paranoid behaviour creating a problem. we had started to try and sort finances in jan. but due to the complexity it has taken til now to establish what split is fair. But supposing we had split the 4th April it would have been totally unfeasable to manage.

there is no supposition about it
if you do, then you do, if you don't then you don't. The implications of when you do are explained in the link...

saintalan

booksurr wrote: »

not true. There are very specific rules regarding transfer of mortgages between separated couples both before and after a divorce as per the helpsheet linked by Tbagpuss.

Apologies if I misled the OP but as I said "I am not sure what other factors are involved re the transfer of properties in your situation but sure others will be along to assist."

I didnt word it very well.

Regards

Alan

getmore4less

Transferring the properties into trust(s) with no sale till you both die is probably a very bad idea.

It puts a restriction on the trustees that will limit their ability to manage the trust effectively.