Married couple planning to live separately, what are the council tax implications please.

Grumpy_chap

lincroft1710 said:

Do be aware that if you both retain ownership of the current marital home and one of you purchases another property, 

That scenario might also give rise to a future CGT liability.

In fact, I think a married couple can only have one property as PPR (principal private residence), so a married couple owning two homes will result in a CGT liability on whichever of the homes is not PPR.

Albermarle

ninaluna754 said:

lincroft1710 said:

Do be aware that if you both retain ownership of the current marital home and one of you purchases another property, the council may well consider what you say you intend to do as attempting to circumvent the "second home premium" and continue to charge full CT on the former marital home and double CT on the new place 

Thank you, our plan is to sell our current marital home, split the equity in half and each buy a new smaller place.

What about splitting other assets ( savings etc)?
Normally it is best to have a clean split, by actually getting divorced and having a legal agreement about finances.
Although it might seem a bit brutal as you are  still friends, there is no reason that an agreed divorce and financial split can not be done amicably.
It could stop any future issues with new partners,   change of financial circumstances and other possible future life issues.

Bookworm105

Grumpy_chap said:

lincroft1710 said:

Do be aware that if you both retain ownership of the current marital home and one of you purchases another property, 

That scenario might also give rise to a future CGT liability.

In fact, I think a married couple can only have one property as PPR (principal private residence), so a married couple owning two homes will result in a CGT liability on whichever of the homes is not PPR.

technically, whilst you are correct that a married couple has only one main residence between them, the law allows for the scenario where they live in such circumstances that the separation is likely to be permanent
(but have not yet completed the legal divorce).
HS281 Capital Gains Tax civil partners and spouses (2024) - GOV.UK

In that case each has PRR on their own property.
But obviously if joint ownership remains on one of the properties, then that person's share is liable for CGT on that property as they won't be living there.

of course proving permanent separation is much easier when one can produce divorce paperwork to show it, rather than have to evidence a range of subjective assessments of personal "arrangements"

Bookworm105

Albermarle said:

ninaluna754 said:

lincroft1710 said:

Do be aware that if you both retain ownership of the current marital home and one of you purchases another property, the council may well consider what you say you intend to do as attempting to circumvent the "second home premium" and continue to charge full CT on the former marital home and double CT on the new place 

Thank you, our plan is to sell our current marital home, split the equity in half and each buy a new smaller place.

What about splitting other assets ( savings etc)?
Normally it is best to have a clean split, by actually getting divorced and having a legal agreement about finances.
Although it might seem a bit brutal as you are  still friends, there is no reason that an agreed divorce and financial split can not be done amicably.
It could stop any future issues with new partners,   change of financial circumstances and other possible future life issues.

a legal financial settlement and a legal divorce are two separate actions.
You can have one without the other.

Albermarle

Bookworm105 said:

Albermarle said:

ninaluna754 said:

lincroft1710 said:

Do be aware that if you both retain ownership of the current marital home and one of you purchases another property, the council may well consider what you say you intend to do as attempting to circumvent the "second home premium" and continue to charge full CT on the former marital home and double CT on the new place 

Thank you, our plan is to sell our current marital home, split the equity in half and each buy a new smaller place.

What about splitting other assets ( savings etc)?
Normally it is best to have a clean split, by actually getting divorced and having a legal agreement about finances.
Although it might seem a bit brutal as you are  still friends, there is no reason that an agreed divorce and financial split can not be done amicably.
It could stop any future issues with new partners,   change of financial circumstances and other possible future life issues.

a legal financial settlement and a legal divorce are two separate actions.
You can have one without the other.

Good point, but I would think in practice they usually go together.