CGT joint ownership second property

maryella

In 1998 I and my then partner (unmarried) purchased a buy-to-let flat which was rented out until 2002 when we separated and my ex-partner move into the flat. (I continued to live at the house which I bought in 1983 but which was put into joint names in 1999. )
We now want to sell the flat. I suppose he must be entitled to CGT exemption as he has lived there for 5 years; but will I have to pay CGT on my share?
I also need to know the tax implications of my house being put back into my sole name as part of a settlement. I hope to sell this soon to buy a house elsewhere.
If it helps rather than complicates, there are more flats owned jointly which we want to separate into solely owned property. ie. We need to 'swap' our half shares.
Anyone who can shed light on this will have a shrine built to them which I promise to worship at daily.

silvercar

He will be exempt for the time it was his home. So if you sell in 2008 then you will have owned for 10 years roughly, so he will be exempt for six-tenths of the gain. He will also get letting relief (max 40k).

The calculation is done in months, but you get the idea.

You will have a CGT liability based on the gain, less buying and selling costs. half the gain is yours and you will be able to use your CGT allowance (9,400 next year) CGT will be 18% of the gain if the sale is made after April 2008.

I would have thought your house going back to solely yours would mean you are buying half a house, you may have a stamp duty liability if the half you are buying is valued at more than 125k. He has a gain that would be liable to CGT on his half of this home. So if has owned his half from 1999 to 2008 and lived in it from 1999 to 2002 he is exempt for the 3 years he lived there plus the last three years of ownership. So the liability is about a third of the gain.

When you come to sell it, there will be no CGT as it has been your main home for the whole time you have owned it.

If he does have a CGT bill from the BTL flat and from giving half your house back to you, he may want to ensure that the sales don't occur in the same tax year as the 9,400 CGT allowance can only be used once each tax year. Of course the figures may mean that he has no CGT to pay on the flat sale.

As far as swapping halves on other flats, I don't know if it is that simple or whether each equity trade incurs a CGT liability and potentially stamp duty.

I don't know if this is a good starting point for you, or asks more questions than it answers, hopefully someoen knowledgable will be along soon.

jimmo

I think what you are looking for is here http://www.hmrc.gov.uk/manuals/cg4manual/cg73000.htm
Basically you and your former partner can avoid Capital Gains Tax now but you will face the full liability when you sell.
The first thing to remember is that if either of you has occupied a property as your main residence that particular property cannot come within the concession.
If you and your partner can co-operate on this you can probably achieve a satisfactory result but if you have fallen out…..
If you have a number of jointly owned properties I really think you need quality professional advice.