Second property and second marriage

AyJaydee

Can anyone please tell me what the situation is regarding a 2nd property, when it is as a result of 2nd marriage?

To explain; When my Wife divorced from her first Husband, he bought a moderate sized house for her and their Children as his clean-break settlement.

When I was divorced from my first Wife, I used my split of assets as a deposit on a small property that I bought for myself, which I now own outright.

After my Wife and I met, we dated for several years before marrying. I moved into her property and have been renting out my place ever since. Her Children grew up and flew the nest.  We are both retired.

When we wrote our Wills, we wrote them such that if if I outlive her, then I can continue living in her property and then it passes onto her Children. If she survives me, then she can enjoy the rental income from my place and then it passes onto my Children. We did it this way so that neither set of offspring can disinherit the other.

We have occasionally talked about the possibility of selling both properties and buying one together.

My property also ‘enjoys’ a most unpleasant neighbour from hell, hence another reason for considering selling it. I know that if I did sell, then I may be liable for a CG Tax bill, although the property value is low so I wouldn’t expect it to be high.

Someone suggested to me that since we separately owned these properties from before we married, then would my place be a ‘2nd property’ for tax purposes, especially since in the terms of our wills, neither of us has a claim of ownership on the other’s property.

Does anyone know the answer to this one? Thank you.

Flugelhorn

when you say 2nd property for tax purposes? what tax are you referring to? you have mentioned CGT - yes that is likely payable - what else is payable?

silvercar

Once you married you can only have one principal private residence between you. So you would be subject to CGT on the sale of your old property. You do get exemption for the time it was your home and the last 9 months of ownership.

AyJaydee

Thank you for that, although not what I wanted to hear.  

Flugelhorn

AyJaydee said:

Thank you for that, although not what I wanted to hear.  

remember to claim for the exempt periods of time etc 

I was ever grateful to my very practical  solicitor relative who on my wedding day advised us to sell one of our properties within the next year (we did)

AyJaydee

A bit late for that Flugelhorn.  I initially wanted to keep mine because having come out of one disaster, I did not want to let go of this lifeline.  As it turns out, the rental has enabled us to keep our heads a little higher above the mire that this country is currently in.  We are not wealthy pensioners.