Divorce and property takeover and capital gains tax

poppet17

Marital home was purchased for £249,000 - 2024 - two years ago there was a seperation and the wife remained in the marital home while the husband moved out - the house was valued at £200,000 due to repairs that needed doing. The outstanding amount of the mortgage is £110,000 and the wife has secured a mortgage in her own name and the husband has agreed to accept £20,000 as a divorce settlement. He refuses to pay any capital gains tax that is incurred. My question is would there actually be any capital gains tax to pay?

Caz3121

it sounds like a loss rather than a gain if the property has dropped £50k so CGT would be zero

poseidon1

No gain in this scenario, but for the benefit of others please note the following extract from the link below -

A property can be transferred from one spouse to another free of any capital gains tax if they are not separated. If they have separated, then for disposals of assets from one to the other on or after 6 April 2023, the capital gains tax exemption is available until the end of the third tax year after the tax year in which they separated (or if earlier, the date of their divorce or separation order)

https://www.patrickcannon.net/news/cgt-on-divorce-and-separation/#:~:text=A%20property%20can%20be%20transferred,their%20divorce%20or%20separation%20order).

The entire article is worth reading for anyone affected by this issue.