CGT following divorce - please help!

greg2701

Hi all,

Desperate plea for help!

Background:

- married 2017, bought house 2018
- separated September 2021
- I moved out of jointly owned marital home March 2022 to live with friend
- moved from friends in to rented house (not owned by me) in September 2022
- house sold September 2023 completed today (she moved out Sep 2023 and it remained vacant until completion)
- consent order been granted by courts in November 2023, financial order agreed and being written up by solicitor with equity split of 34.5% to me, 65.5% to her
- house appreciated and sold for £33k over original purchase value.

My questions surrounding capital gains. To put it simply, am I liable to pay the capital gains on my share of the equity? I can't make head to tail from reading online, but from what I have read, I can use that house as my private residence relief as I've not bought another house since and therefore no CGT payable?

Your expertise would be hugely appreciated as I'm now super stressed that I'm going to be liable for a chunky tax bill. Thanks in advance!

Keep_pedalling

Your share of the gain is just over £11k but as you can claim predicate residence relief for 4 of the 6 years you owned it your taxable gain is well below your £6k annual allowance, so no CGT to pay unless you have other gains using up that allowance.

[Deleted User]

Keep_pedalling said:

Your share of the gain is just over £11k but as you can claim predicate residence relief for 4 of the 6 years you owned it your taxable gain is well below your £6k annual allowance, so no CGT to pay unless you have other gains using up that allowance.

 There  have been substantial changes to CGT rules on separation and divorce from last year. I don’t think that the op has too much to worry about regarding any liability. (Clearly you type as badly as I do and meant private residence relief)

https://www.clarkewillmott.com/news/changes-to-capital-gains-tax-treatment-upon-divorce/

greg2701

Thanks so much both. There are no other gains, just the property. Do I have to specify elect that residence as my PRR or is that automatic do you know? 

I don't want to end up with an enormous tax bill from HMRC for not declaring something 

[Deleted User]

greg2701 said:

Thanks so much both. There are no other gains, just the property. Do I have to specify elect that residence as my PRR or is that automatic do you know? 

I don't want to end up with an enormous tax bill from HMRC for not declaring something 

Clearly there is no chargeable gain. Unless you normally complete a tax return there is no need to inform HMRC at all. 

greg2701

[Deleted User] said:

greg2701 said:

Thanks so much both. There are no other gains, just the property. Do I have to specify elect that residence as my PRR or is that automatic do you know? 

I don't want to end up with an enormous tax bill from HMRC for not declaring something 

Clearly there is no chargeable gain. Unless you normally complete a tax return there is no need to inform HMRC at all. 

Really appreciate the help, thanks so much!