Divorce CGT

DavidPanther74

Hi

 

I’m just about to come to the end of the divorce process, and am wondering about Capital Gains Tax implications of our situation.

 

We bought our house for £165k in September 2006, marrying in 2013.  The house had the mortgage paid off, and I moved out on 23rd October 2020.  Our Consent Order was approved by the judge on 21st June 2021.  I am told we are a couple of weeks away from completion on the mortgage for her to buy my half of the house, with transfer of title from joint names into her sole name happening in the next couple of weeks.  The house has been valued at £230k, an increase from purchasing of £65k.

 

Wondering if anyone is familiar with the rules in such a situation?  I moved out in one tax year, and I’m selling her my half of the house in another tax year, with my departure date and transfer of title more than 9 months apart.  My understanding is that the 9-month gap from moving out to selling leaves a CGT obligation payable.  Is that correct?  And does it hinge on the actual date transfer happens or the date of the court order?

 

How would HMRC know that CGT is due?  Do they depend on being notified by me of the situation, or will a CGT bill land my way automatically somehow?

 

She cheated on me, which is what caused all of this to happen.  She also caused huge delays in filing for divorce and in the approval of the Consent Order (a long story).  So it’s a further kick in the teeth to have heard about possible CGT being added to my woes, but hoping to at least get knowledge and certainty on the matter.

 

Thanks

David

[Deleted User]

DavidPanther74 said:

Hi

 

I’m just about to come to the end of the divorce process, and am wondering about Capital Gains Tax implications of our situation.

 

We bought our house for £165k in September 2006, marrying in 2013.  The house had the mortgage paid off, and I moved out on 23rd October 2020.  Our Consent Order was approved by the judge on 21st June 2021.  I am told we are a couple of weeks away from completion on the mortgage for her to buy my half of the house, with transfer of title from joint names into her sole name happening in the next couple of weeks.  The house has been valued at £230k, an increase from purchasing of £65k.

 

Wondering if anyone is familiar with the rules in such a situation?  I moved out in one tax year, and I’m selling her my half of the house in another tax year, with my departure date and transfer of title more than 9 months apart.  My understanding is that the 9-month gap from moving out to selling leaves a CGT obligation payable.  Is that correct?  And does it hinge on the actual date transfer happens or the date of the court order?

 

How would HMRC know that CGT is due?  Do they depend on being notified by me of the situation, or will a CGT bill land my way automatically somehow?

 

She cheated on me, which is what caused all of this to happen.  She also caused huge delays in filing for divorce and in the approval of the Consent Order (a long story).  So it’s a further kick in the teeth to have heard about possible CGT being added to my woes, but hoping to at least get knowledge and certainty on the matter.

 

Thanks

David

If you moved out in October 2020 I can’t see you having any CGT liability. You get Private Residence Relief for the time it was your only or main residence plus there’s a CGT allowance of £12,300 this tax year. 

Married couples can only have one main residence too so if your legally still married then it should still count as your main residence anyway. 

Bottom line is your CGT liability is going to be zero.