Capital Gains Tax - or not?

angelinamay

Hello,

I split from husband over 10 years ago, he stayed in marital home.  I purchased a modest home and have lived there ever since.  Both properties are SSTC.  Both husband and myself have had offers accepted on 2 other properties.  Will I be stung for Capital Gains Tax ? I will need my share of the marital home to finance the new home I have my offer accepted on, but there will be an amount left over after purchase.

Thanks

Bookworm105

so you remain a co-owner of the ex marital home whilst now owning a new place you live in?
the new place has principal private residence status for you, but as the separation was so long ago your share of the ex martial home is now liable for CGT from the date of the separation / divorce / financial settlement 

the above assumes there is NOT a "mesher order" in place in respect of the ex-marital home. If there is, your share would still be covered by deemed PPR

angelinamay

Bookworm105 said:

so you remain a co-owner of the ex marital home whilst now owning a new place you live in?
the new place has principal private residence status for you, but as the separation was so long ago your share of the ex martial home is now liable for CGT from the date of the separation / divorce / financial settlement 

the above assumes there is NOT a "mesher order" in place in respect of the ex-marital home. If there is, your share would still be covered by deemed PPR

Both myself and husband classed as 100% owners.  There isn't a formal date of separation.

Bookworm105

angelinamay said:

Bookworm105 said:

so you remain a co-owner of the ex marital home whilst now owning a new place you live in?
the new place has principal private residence status for you, but as the separation was so long ago your share of the ex martial home is now liable for CGT from the date of the separation / divorce / financial settlement 

the above assumes there is NOT a "mesher order" in place in respect of the ex-marital home. If there is, your share would still be covered by deemed PPR

Both myself and husband classed as 100% owners.  There isn't a formal date of separation.

so you are just living apart without a formal divorce, in which case you own a second property and are liable for CGT on it from the date you moved out of it (it ceased to be your main home as "a matter of fact")

Both of you "classed as 100% owners" means you have a joint tenancy (not tenants in common) so the split is "equal", ie 50/50 in your case as there are 2 owners

km1500

when you moved out the marital home ceased to be your principal private residence. 

you moved to your new place which became your principal private residence and thus that one will not be liable to CGT on any gain when you sell it 

however you will be liable for cgt on 50% of any gain on the marital home since you moved out. You can work the gain out by apportioning the total gain. You are also allowed to have a nine month overlap, also buying and selling costs can be offset as well as any genuine improvements.

p00hsticks

km1500 said:

when you moved out the marital home ceased to be your principal private residence. 

you moved to your new place which became your principal private residence and thus that one will not be liable to CGT on any gain when you sell it 

however you will be liable for cgt on 50% of any gain on the marital home since you moved out. You can work the gain out by apportioning the total gain. You are also allowed to have a nine month overlap, also buying and selling costs can be offset as well as any genuine improvements.

My inexpert understanding is that for PPR purposes married couples are usually treated as a single unit and can only have one PPR between them.

I'm not sure how this affects things as the OP suggests that there has been no formal separation or divorce. 

gwynlas

Some married couples maintain their own properties throughout. Given seperation informal your house might be classed as second home however given its been your primary residence for over ten years I would be looking for legal advice on tax status.

Bookworm105

p00hsticks said:

km1500 said:

when you moved out the marital home ceased to be your principal private residence. 

you moved to your new place which became your principal private residence and thus that one will not be liable to CGT on any gain when you sell it 

however you will be liable for cgt on 50% of any gain on the marital home since you moved out. You can work the gain out by apportioning the total gain. You are also allowed to have a nine month overlap, also buying and selling costs can be offset as well as any genuine improvements.

My inexpert understanding is that for PPR purposes married couples are usually treated as a single unit and can only have one PPR between them.

I'm not sure how this affects things as the OP suggests that there has been no formal separation or divorce. 

yes, in normal circumstances they have only one, which must be the same for both of them

but, OP claims "informal separation" occurred and patently they no longer live together, so bullet 3 applies:
HS281 Capital Gains Tax civil partners and spouses (2024) - GOV.UK (www.gov.uk)

You and your spouse or civil partner are treated as living together unless you’re separated:

• under a court order
• by a formal Deed of Separation executed under seal (in Scotland a deed should be witnessed)
• in such circumstances that the separation is likely to be permanent

In each case the marriage or civil partnership must have broken down. If the marriage or civil partnership has not broken down but the 2 of you do not live in the same house, you’re still treated as living together for Capital Gains Tax purposes.

So, for CGT purposes, OP is an individual who owns 2 properties and is thus liable to CGT on the sale of the one she does not live in. Her liability on the ex husband's property will be the proportion of time represented by the period since she left him (approx 10 years)  over the total ownership period (?)