CGT on transfer of properties through Divorce

jamgar

Definitely confused and extremely worried in the meantime, while I arrange specialist tax advice help.

So are you saying that even though I moved out on November 2019 (and the courts will likely see that as the date of separation) even though 2 years have passed my CGT calculation of disposal of the family home will still be considerate of relief for the time that I lived at the property as per my calculation above ? and no chance that I have to pay 28% of the gain (without the relief)?

[Deleted User]

Steps:

1) calculate the gain before reliefs.
2) calculate period of ownership in months
3) calculate period where property was main residence and add nine months.
4) Principal private residence relief is 3) divided by 2) multiplied by 1)

jamgar

thank you, so that means irrelevant of the date I moved out and separated the relief still applies, thanks

Jeremy535897

The date you moved out is presumably the date the property ceased to be your main residence, so it is relevant for working out the exempt part of the gain, as explained by purdyoaten. It doesn't create a deemed sale or anything like that.

jamgar

purdyoaten2 said:

Steps:

1) calculate the gain before reliefs.
2) calculate period of ownership in months
3) calculate period where property was main residence and add nine months.
4) Principal private residence relief is 3) divided by 2) multiplied by 1)

1)    calculate the gain before reliefs.

650-408= 242,000 (my share minus costs) – 237/2 = £118,500

2) calculate period of ownership in months

May 2012 to November 2021 = 9 and a half years = 108+6 = 114 months

3) calculate period where property was main residence and add nine months.

May 2012 to November 2019 = 7 and a half years = 90 months

4) Principal private residence relief is 3) divided by 2) multiplied by 1)

 90 / 114 multiplied by 118,500 = £93,552

 Not sure on this ......

• So is that £118,500 – £93,553 = the gain amount net the amount of relief? = £24,947
• £24,947 – £12,300 annual CGT allowance = £12,647

Therefore I need to pay £12,647 @ 28% = £3,541.16  – this differs from earlier calculation of needing to pay £1030.96 ?

[Deleted User]

You missed the ‘and add nine months part’ so the fraction becomes 99/114, not 90/114.

jamgar

And just to confirm if taking into account the cost of the extension £50,000 total .  £25,000 is is just taken away at step 1?

Jeremy535897

Step 1 becomes £118,500 - £25,000 = £93,500. Chargeable proportion = 15/114 = £12,302, less £12,300 annual exemption = £2 at 28% = £5.60. Maybe there were a few other costs, or doing it in days might help.

[Deleted User]

Jeremy535897 said:

Step 1 becomes £118,500 - £25,000 = £93,500. Chargeable proportion = 15/114 = £12,302, less £12,300 annual exemption = £2 at 28% = £5.60. Maybe there were a few other costs, or doing it in days might help.

Or even 56p 😊

Jeremy535897

[Deleted User] said:

Jeremy535897 said:

Step 1 becomes £118,500 - £25,000 = £93,500. Chargeable proportion = 15/114 = £12,302, less £12,300 annual exemption = £2 at 28% = £5.60. Maybe there were a few other costs, or doing it in days might help.

Or even 56p 😊

Yes it was a rather high tax rate!