Capital Gains Tax - unsure if liable

Triangle999

Hi all, looking for some advice for a family member. I’ll try to keep it brief, aware that may need financial advice but thought would give it a go on here first.

*Brother owned a property (joint tenants) with then spouse and left in December 2020 due to relationship breakdown and rented nearby.
*Then spouse stayed in marital home with their joint children and house went on the market in 2021.
*During this period a consent order was drawn up with % splits - brother receiving a lot less due to keeping pension.
*Divorce also issued in this period - both consent order and decree absolute issued in June 2024.
*House took a VERY long time to sell but finally completed this month and funds received - £30,000. Former spouse received £240,000 (and are now living elsewhere). Rest of funds went on paying off mortgage and legal/estate agent fees.

We’ve been googling like mad trying to work out if CTG is payable - not helped by the time taken to sell the property! 

If anyone could provide any clarity it would be much appreciated, thank you. 

Keep_pedalling

how much did they pay for the house?

Triangle999

They purchased the house for £345,000 - it has now sold for £390,000.

Bookworm105

Triangle999 said:

Hi all, looking for some advice for a family member. I’ll try to keep it brief, aware that may need financial advice but thought would give it a go on here first.

*Brother owned a property (joint tenants) with then spouse and left in December 2020 due to relationship breakdown and rented nearby.
*Then spouse stayed in marital home with their joint children and house went on the market in 2021.
*During this period a consent order was drawn up with % splits - brother receiving a lot less due to keeping pension.
*Divorce also issued in this period - both consent order and decree absolute issued in June 2024.
*House took a VERY long time to sell but finally completed this month and funds received - £30,000. Former spouse received £240,000 (and are now living elsewhere). Rest of funds went on paying off mortgage and legal/estate agent fees.

We’ve been googling like mad trying to work out if CTG is payable - not helped by the time taken to sell the property! 

If anyone could provide any clarity it would be much appreciated, thank you. 

the crucial bit is the fact brother rented, ie did not purchase another property which would, itself, be exposed to CGT

therefore it appears brother meets the 3 conditions necessary for him to retain full Private Residence Relief for this entire ownership period, notwithstanding the fact he ceased to live in it following the separation/divorce. (Did the divorce/court order specifically state what should happen to the house. eg. she has right to live there until sold?)

• The property is transferred (sold) to someone other than the remaining spouse or civil partner.
• During the period after having moved out, but before the sale, no other property becomes a main residence of the spouse or civil partner who has moved out.
• During the period after having moved out, the property in question remained the main residence of the remaining spouse or civil partner.

Capital gains tax on separation and divorce | Low Incomes Tax Reform Group

CG65356 - Private residence relief: separation, divorce or dissolution of civil partnership: spouse or civil partner transferring interest - HMRC internal manual - GOV.UK

Triangle999

That is so helpful, thank you. Yes, consent order very clearly states/stated that the ex spouse would reside in the house until sold as well as %’s of funds received. 

I think the fact it has taken so long to finally sell and complete had caused concern about CGT, those links are also very helpful. 

SVaz

Yes, married couples are protected from CGT when splitting, the half of a co-habiting couple who moves out is not  - they only have 9 months grace.