Selling 2 properties - CGT - impending divorce

selfhelp

Hi I've lived apart from my ex for around 12 years now although we did try a reconciliation for 4 years but it unfortunately didn't work out. What seemed fairly straightforward to divorce and sell both properties and split 50/50 and go our separate ways has now turned in to a real can of worms.

We have the marital home we've jointly owned for 22 years and the other property I purchased in my name I've owned for 12 years. It was let during the 4 years we got back together. From what I've found out there is CGT due on the second property which I understand but that if I use the proceeds within 18 months i.e. for an investment property there is no CGT but this becomes due on the sale of that next property irrespective I will more than likely live in it as my own residence (I may have this wrong).

What's slightly more concerning is whether there is CGT to be paid on the marital/main residence as I was always under the impression this was non taxable. The concern being that in 22 years it has gone up substantially in value. I'm also assuming it's probably a bit late in the day to commence any tax mitigation as HMRC would more than likely flag it. We're both lower rate tax payers/band
Many thanks

00ec25

sorry you have misunderstood "roll over relief". It does not apply to sale of residential property, forget about "reinvesting" - you can't.
Agreed that in all other respects yes you were running a lettings business, but for CGT purposes residential property is an explicit exclusion from that relief

your actual situation is very much more complex given you got back together for 4 years, as what counts as your (exempt) main home for CGT purposes is based entirely upon:
a) the period you were legally married and (note AND) living together

b) the period you remained married, not yet divorced, but (note BUT) were not living together in (further caveat coming ...) circumstances where the separation was likely to be permanent

you got back together again for 4 years, so between you first moving out and then moving back that is going to be hard to show it meets that criteria

c) the period after you legally divorce but retain ownership of the ex martial home (you will have a court order which sets in stone what happens in this period)

you will need to provide more timelines if you want a more tailored answer,
read:
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-2018


so:
Property A - "marital" home
- exempt for the time you lived there as a married couple living together
- not exempt when you were not, since there is no court order as yet and your "separation" was permanent
- a grey area period before you got back together ...


Property B - let property, sole ownership
- liable for any period when it was let (or between lets)
- liable for any period you were classed as living together in property A
- exempt for any period you personally lived there whilst permanently separated and not living in property A (conversely of course making that period liable on A)
- able to claim letting relief if at any point in time of your ownership of B, you can show it was in reality your exempt main home (this is subject to your completing its sale before 1April 2020)