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Capital Gains Tax
tizzy71
Posts: 11 Forumite
Hello. Newbie here and I may have posted this in the wrong place so please remove if necessary.
So... I Cleared the £70k mortgage off our family home 6 months before we split up and I left the property. That was in 2018.
We paid £175000 for the house in 2002 and it is now on the market for £400000. (2023)
We will be splitting the sale 55/45 in her favour.
I've not lived at the property since 2018.
Will I be liable for Capital gains tax?
If I am what would the % be and would it be only on my 45% share of the final sale price?
I'm self employed and a lower tax payer if that helps.
Any advice would be gratefully received.
Thank you.
So... I Cleared the £70k mortgage off our family home 6 months before we split up and I left the property. That was in 2018.
We paid £175000 for the house in 2002 and it is now on the market for £400000. (2023)
We will be splitting the sale 55/45 in her favour.
I've not lived at the property since 2018.
Will I be liable for Capital gains tax?
If I am what would the % be and would it be only on my 45% share of the final sale price?
I'm self employed and a lower tax payer if that helps.
Any advice would be gratefully received.
Thank you.
0
Comments
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Were you married?
Has there been a divorce?
No reliance should be placed on the above! Absolutely none, do you hear?1 -
We lived together in the property from purchase in 2002.
We married in 2011 and divorced in 2018.0 -
So you bought in 2002 for £175K and if you get £400K in 2023 you have both made a profit of £225K over 21 years.
CGT is worked out in months !
So approx £10,700 each year.
Now you lived in the house from 2002 till.2018 so No CGT for that time.
So possible CGT from 2018 till 2023 and then only on your share
You also have allowances but about to be reduced this April1 -
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It's not possible to say what the rate will be, because we don't know the gain, or your income. Your share of the gain will be added to your taxable income in the tax year of the sale (presumably 23/24) and charged at your marginal rate. If, with the gain added, you are a standard rate taxpayer, that will be 18%. Once you cross the higher rate threshold, it will be 28% on the marginal amount.
If you able to complete the sale before 6/4/23, then do so, as the CGT allowance will be more than halved after that date (from £12.3k to £6k).
You can offset the purchase, sale and improvement (not maintenance) costs against the gain, or your share of them. The gain will be based on the total months of ownership, less your time in residence, less 9 months.No free lunch, and no free laptop
1
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