Divorce, Tax and Properties

GillyEdmonds

Good evening all
I'm hoping to be able to get some advice on quite a complex situation. My husband and I separated 8 years ago after 15 years of marriage and I left the marital home and have rented privately since then. We bought the marital home before we got married and the house is still in both our names (his name and my maiden name) and we've paid the mortgage off. During the marriage, 15 years ago, we bought a second home for my mother to live in (rent free) and this is in his name and my married name, and we've also paid the mortgage off this one.

My mother passed away in August last year so we have now decided to finally get divorced and sort out the financial situation. We have agreed between us that my husband will keep the marital home, I will keep the second property and he will pay me a lump sum of approx £96k to make it a fair split (due to the difference in the values of the properties).

I filled in the divorce application and sent it off with the original marriage certificate but within 2 days of doing it, was made aware of the possible tax implications with regards to the second property (capital gains tax).

I have been told that if we had transferred the deeds whilst still 'married' then CGT would not apply. If we transfer the deeds whilst married, would any other tax be applicable (eg Stamp Duty etc)?

Also, I quite stupidly sent off the original marriage certificate without getting a certified copy so as it stands, we can't transfer the deeds on one of the houses as the deeds are in my maiden name! Will the best solution be to withdraw the divorce application, resolve the financial issues and then re-apply for the divorce?

Hope someone can help with an explanation that I can understand

benjus

Disclaimer: I'm not a lawyer or a tax expert (so I can't comment on whether the CGT information you've been given is correct), but this is how I understand things:

You aren't divorced until the court issues the Decree Absolute, which you have to apply for at least 6 weeks and 1 day after it issues the Decree Nisi. If you've only just started the process, you're not going to be divorced for a while yet.

Get yourself a new marriage certificate from the General Register Office, continue with the divorce application while you sort out the houses, but make sure you don't apply for the Decree Absolute until you're ready.

Will you need to change anything that you have already sent in the application?

GillyEdmonds

Thanks benjus, I had hoped to be able to do that but unfortunately we got married abroad and did not 'register' the certificate here so would have to get a copy of the licence from St Lucia which apparently could take quite a while. I am looking into doing that but can't even work out how to send a pre-paid envelope for it to be returned. I emailed them a week ago but haven't had a reply yet.

GillyEdmonds

Benjus, I don't suppose you know about the divorce procedure do you? Does my husband have to return the signed copy straight away to acknowledge the divorce application and then if I don't apply for the decree absolute will it just continue to remain outstanding indefinitely?

00ec25

GillyEdmonds wrote: »

My husband and I separated 8 years ago after 15 years of marriage and I left the marital home and have rented privately since then.

so that is pretty strong evidence that the marriage had reached the point of permanent separation 8 years ago despite lack of legal divorce

GillyEdmonds wrote: »

We bought the marital home before we got married and the house is still in both our names (his name and my maiden name) and we've paid the mortgage off. During the marriage, 15 years ago, we bought a second home for my mother to live in (rent free) and this is in his name and my married name, and we've also paid the mortgage off this one.

for CGT purposes (but not for the purposes of your financial settlement as part of a legal divorce proceeding) having a property in sole ownership in maiden name will be relevant

having in joint ownership makes it irrelevant if it's maiden or married name, you are both legal owners...

so, for CGT
transfers between the pair of you can still be on a no gain no loss basis during the tax year of separation, but that was 8 years ago. So you will need to take professional advice because you are no longer "living together" and therefore are subject to....

"If a transfer occurs between you and your spouse or civil partner after the end of the tax year in which you stop living together, there are rules to decide the date of disposal and the amount of consideration on disposal. These rules depend on your particular circumstances and the information you will need is the date of :

• any decree absolute or dissolution of the civil partnership
• the court order if the asset was transferred by such an order
• any other contract under which the asset was transferred

As the rules are complicated, they’re not included in this helpsheet. Once you hold the necessary information, ask us or your tax adviser for help"

https://www.gov.uk/government/publications/husband-and-wife-civil-partners-divorce-dissolution-and-separation-hs281-self-assessment-helpsheet/hs281-spouses-civil-partners-divorce-dissolution-and-separation-2016

Keep_pedalling

You may still be married but the fact that you are separated, means CGT May apply on transfer of property.

https://www.gov.uk/money-property-when-relationship-ends/tax

http://www.shipleys.com/resources/issue/taxation-and-divorce

antrobus

GillyEdmonds wrote: »

Benjus, I don't suppose you know about the divorce procedure do you? Does my husband have to return the signed copy straight away to acknowledge the divorce application and then if I don't apply for the decree absolute will it just continue to remain outstanding indefinitely?

See here
http://www.divorceresource.co.uk/changed-mind-about-divorce.html