Transfer of Equity

Molly_dollly

I am hoping someone can just offer a little advice please. 

My husband and I separated in September and I had to leave our marital home due to lots of different factors. 

He then said he was buying me out of our mortgage - and has begun the process. 

I’ve been reading up (scarily!) that I may have to pay Captial Gains Tax? Can someone help me with this please? 

I’ve read that if I lived with him for more than half of the tax year then I won’t need to pay it.. but if he buys me out after 6th April this year then I will need too…

The government website doesn’t ask for dates when checking about this it just says between spouses we can transfer and it won’t incur the CGT. 

I have contacted a few accountants, to ask the same question, but I am so worried, as it would be thousands I would loose! And I wanted to put down a deposit on a new home, my own home… and that will take about 15,000 of it. 

Please be kind in your comments, I’ve been in a relationship that just want very nice, I am very much broken and I am asking for a little help. 

For reference; 

house valued at £270,000
mortgage remaining is £90,000
we have agreed a cash buy out of £65,000. 

I lived with him until 8th September 2024 and in the house 100% since we bought it in 2015. 

Thank you. 

lisyloo

You're probably entitled to £90K (50% of the equity) of the house.
Why have you agreed to £65K?
have you had advice? I'm concerned you're being taken advantage of when you're at a low point.
It may cost thousands for advice but on what we know you're looking at a £25K loss here.
Are there other assets your keeping instead?

I don't think you need to worry about CGT.
Please get some advice.
Did you verbally agree this with your partner or have you signed anything yet?
He can't do anything on the mortgage or house without your signature (forging it is fraudulent).

Money and property when you divorce or separate: Tax when transferring assets - GOV.UK

If you transfer an asset when you’re separated

If you lived together at any point in the tax year that you transferred the asset, the normal rules for spouses and civil partners apply.

user1977

Molly_dollly said:

I’ve been reading up (scarily!) that I may have to pay Capital Gains Tax? 

Where did you read this?

DE_612183

user1977 said:

Molly_dollly said:

I’ve been reading up (scarily!) that I may have to pay Capital Gains Tax? 

Where did you read this?

Probably about "selling a house you don't live in"...

turnemc

Is it Capital gains you’re worried about ? Or potential Stamp Duty ? (Below from a web search)

Separation agreements

If a couple agrees to separate permanently but without getting a court order, they will be treated for SDLT purposes as an unmarried couple. This means that for the purposes of the 5% surcharge, each spouse can buy a house without being treated as owning any property the other spouse owns. This also means that transfers of property between them will be exempt from stamp duty.

Court orders on divorce or separation

A transfer of property between a couple on a divorce, annulment, judicial separation or a separation order will be exempt from SDLT as long as they are the only parties to the transfer or transfers and the transfers are made under:

• An order of the court or
• An agreement between the couple before or after the court order but in contemplation of or in connection with it. The agreement should be a formal written agreement signed by both of them.

Hoenir

Suggest you consult a Family Law Solicitor and seek advice as to your rights and the formalties of obtaining a clean financial break formally. 

amnblog

You don't pay Capital Gains Tax on your main home.

See this Gov page reference Private Residence Relief