Transfer of house to ex

Nick_1234

Just curious if I will be liable for capital gains tax if my ex buys me out of the mortgage. I've since purchased another home but still paying the mortgage on the previous family home.
Part of the divorce terms was that at a future point my ex would have to pay me 25% of the house equity and take over the mortgage. The house value is £250k with about 80% equity.

Any advice would be appreciated
Thanks

TBagpuss

You may be liable for CGT, yes.

Broadly speaking, you would need to look at the total increase in value of the property during the period from when it was bought, to when you transfer it to her.  You assume that the gain was equally spread over the whole time you owned it so work out the increase per month. If you owned it jointly then the default is that you have half of that. If the divorce agreement was made at the time you separated and explicitly states you only have 25% that may  mean you only have to calculate based on a 25% interest - this may depend on the timing and wording of the order so you might need advice

You don't pay CGT for the period it was your main home and you get the last 18 months ignored too, so the amount you potentially pay tax on is:- 

average gain per month x (number of months since it stopped being you main home - 18) = gain

You then have your annual allowance for CGT which IIRC is about £12,500

so gain - £12,500 = chargeable gain (amount you pay tax on)