split but not divorced, between two properties, how to avoid CGT for selling my house?

timea

  Hi, 
Me and my husband purchased our 1st house in 2017 on which we still pay mortgage. In 2019 I bought a land in my name and build a house.The house construction was finished last year in feruary and I rented the property for one year. Now I split from my husband but we decided not to go for a divorce for the sake of the children, still I would like  to move and move to spain next year in 2025 and for this I need to put the house that is in my name for sale. My husband agreed that this belongs to me but my question is do I need to live there in order to avoid CGT or I wil need to pay this either way. I can move there but I need to know first which are my options. Thank you 

eskbanker

https://www.gov.uk/tax-sell-home explains Private Residence Relief, which should be available to eliminate at least some of your CGT liability if you move there.

https://www.gov.uk/tax-sell-property is the equivalent for selling property that isn't your home.

Keep_pedalling

eskbanker said:

https://www.gov.uk/tax-sell-home explains Private Residence Relief, which should be available to eliminate at least some of your CGT liability if you move there.

https://www.gov.uk/tax-sell-property is the equivalent for selling property that isn't your home.

Will that be the case if they remain married and not planning to get divorced?

I can’t see the point of not actually getting divorced for the sake of the children if you are going to be living in separate countries. Best to sort it out now and to settle the finances rather than leave it for years in the future when things could get a lot more complicated. 

Jeremy535897

Have a look at https://www.gov.uk/government/publications/husband-and-wife-civil-partners-divorce-dissolution-and-separation-hs281-self-assessment-helpsheet/hs281-capital-gains-tax-capital-civil-partners-and-spouses-2022

timea

Keep_pedalling said:

eskbanker said:

https://www.gov.uk/tax-sell-home explains Private Residence Relief, which should be available to eliminate at least some of your CGT liability if you move there.

https://www.gov.uk/tax-sell-property is the equivalent for selling property that isn't your home.

Will that be the case if they remain married and not planning to get divorced?

I can’t see the point of not actually getting divorced for the sake of the children if you are going to be living in separate countries. Best to sort it out now and to settle the finances rather than leave it for years in the future when things could get a lot more complicated. 

  You are right but we have a good relationship and two of my litte ones are a bit scared when we speak about a divorce as their best friend parents divorced and it was a very ugly one and they know the whole story from their friend. So every time we had an open argument they asked us not to divorce. for now I need we need to stay as we are. I am just trying to save some money in order to be more easyer to start over with my life. 

Bookworm105

timea said:

In 2019 I bought a land in my name and build a house.The house construction was finished last year in feruary and I rented the property for one year. Now I split from my husband but we decided not to go for a divorce for the sake of the children, still I would like  to move and move to spain next year in 2025 and for this I need to put the house that is in my name for sale. My husband agreed that this belongs to me but my question is do I need to live there in order to avoid CGT or I wil need to pay this either way. I can move there but I need to know first which are my options. Thank you 

you remain legally married and married couples are deemed to have only main residence at a time, which must be the same property for both of them,
However, it is possible that you could make a case to say the circumstances are now such that the separation is likely to be permanent, even though you have not legally divorced. Judging what that means in reality is often a "matter of the facts" of the case, but it appears you are still physically living in the (ex) marital home, so that property remains your private residence relief one (whether permanently separated or not).

The property you own will never be 100% exempt from CGT as you have never lived in it since it was constructed. Private residence relief applies as % of the time you owned it. Therefore, if you now moved into it (which would assist the matter of fact of permanent separation) and remain there until 2025 when you go to Spain, that time period of your occupation would be exempt (plus a further 9 months if you move out before the sale completes).

The % of time from date of construction to date you move in will be liable to CGT, that is unalterable. So to answer your question you cannot avoid CGT, how much you will pay then comes down to the values involved and the size of the gain.