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Amicable divorce, how to deal with the house
MascaraMinx
Posts: 380 Forumite
After 15 years we’ve decided the time is right to get a divorce. We’re still very good friends and have 2 kids, so we’re trying to find a way to allow me to stay in the house with the kids without him suffering too much financial hardship. We both have an equal claim to the equity in the house, which is about £100k each, and no other real assets.
We don’t want to sell & split as this is the kids home and if possible we want them to be able to live here until they finish school.
I can’t afford to buy him out outright.
He wants to buy a flat for himself so will need some money for a deposit.
Between us, we came up with a plan that I would take on the mortgage and release £40-50k so he could buy a place, then the rest he’s owed could be held as a charge until the kids are older. What I hadn’t banked on was capital gains tax. Am I right in thinking he would be liable for CGT on the remaining amount?
He wants to buy a flat for himself so will need some money for a deposit.
Between us, we came up with a plan that I would take on the mortgage and release £40-50k so he could buy a place, then the rest he’s owed could be held as a charge until the kids are older. What I hadn’t banked on was capital gains tax. Am I right in thinking he would be liable for CGT on the remaining amount?
Is there any other solution that might work for us?
Thanks in advance….
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Comments
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No CGT on a family home. Can you afford the new mortgage in your own right, i.e. meet affordability criteria.0
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Everything I’ve been reading suggests there is CGT on family home 9 months after one party moves out and it ceases to be their main residential home. It’s so confusing!0
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See if your lender would be happy for your ex to have a 2nd charge on the property, it removes your ex from the title deeds as owner and has the money owed to him as debt against the property. Also avoids your ex incurring additional stamp duty.
Your solicitor can draft the papers / register it.Mortgage started 2020, aiming to clear it in 2026.1 -
But it wouldn’t attract CGT when it’s eventually transferred to him?0
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Why? It would be a debt owed to him not a portion of the property owned by him.Mortgage started 2020, aiming to clear it in 2026.1
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It's an interesting suggestion. Is there any downside to this? i.e. if he gets into financial trouble could a sale be forced?MovingForwards said:Why? It would be a debt owed to him not a portion of the property owned by him.I’m a Forum Ambassador and I support the Forum Team on Debt Free Wannabe and Old Style Money Saving boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
"Never retract, never explain, never apologise; get things done and let them howl.” Nellie McClung0 -
it's very common usually legally agreed by a Mesher Order/Agreement.Brie said:
It's an interesting suggestion. Is there any downside to this? i.e. if he gets into financial trouble could a sale be forced?MovingForwards said:Why? It would be a debt owed to him not a portion of the property owned by him.
What Is A Mesher Order? - Brookman Solicitors
Mama read so much about the dangers of drinking alcohol and eating chocolate that she immediately gave up reading.1 -
So the charge wouldn’t be treated as a an asset to transfer but a debt to be repaid? So he’d get back what he was owed rather than incurring profit if the house increased in value - is that correct?MovingForwards said:Why? It would be a debt owed to him not a portion of the property owned by him.0
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