CGT & Child Maintenance

_SR

HI

I hope someone can help as I have a couple of issues.

Following a divorce several years ago, my ex wife now has to sell (or give me the money) the old marital home that she still resides in. This was set by a judge in a consent order.

We also have 6 rental properties that she now wants to sell (and probably taking me to court to do so) as she now requires the funds to help purchase another property for her and the 3 kids.

So my question is two-fold.

1. Do I have to pay CGT on the marital home (I know I do on the rental properties)
2. Will CGT form part of my child maintenance

I don't have a problem paying child maintenance or CGT on the rental properties but if by doing so it increases my child maintenance then this seem very unfair.

It seems everything is against me and I might have no alternative but to leave my job or go self employed.

Any advice would be appreciated.

Thanks

SR

Keep_pedalling

1. Yes. Assuming there is sufficient gain on your share.

2. I really can’t see why you would think this. Your ex wifes CG liability comes out of her profit on the sale of the rental properties, it has nothing to do with the cost of raising children.

_SR

Thanks for your input.

IF CGT goes as part of my income, then even though we split the profits, the CMS will use my share to increase my maintenance payments would would more than double them.

Keep_pedalling

_SR wrote: »

Thanks for your input.

IF CGT goes as part of my income, then even though we split the profits, the CMS will use my share to increase my maintenance payments would would more than double them.

OK I see where you are coming from,. The term CGT refers to the tax you owe HMRC on your gains so is definitely not income.

Your actual gains are not classed as income either. You are both simply converting bricks and mortar into a more liquid asset (cash initially), which with the loss of rental income will drive you income down, so unless you can earn as much or more from that cash, your CM obligations should fall as you are brining in less income.

_SR

Thank you very much, I hope you are 100% certain as the CMS were unsure which didn't fill me with any confidence. If this is the case then I really don't mind selling them.

I really appreciate your help.

Many thanks

SR

jimmo

Assuming the marital home was your main residence whilst you lived there you will qualify for private residence relief (PRR) for the period you lived there and the final 18 months of ownership.
The rest depends on what was contained in Consent Order. It is certainly not unusual for a Consent Order to create a trust which entitles the children of the marriage to live in the former matrimonial home as beneficiaries of the trust for a specified period. Such a period would also qualify for PRR regardless of whether you, personally, had your own main residence elsewhere.
For the Consent Order see here.
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg65376

For the general principles of PRR see here.
https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet
For guidance on how to calculate the relief see this thread.
https://forums.moneysavingexpert.com/discussion/5764759top

I claim absolutely no expertise in child maintenance matters.