CGT nightmare on separating from Husband
I have recently separated from my husband and moved back into a house I owned before our marriage …. this is where I believe my nightmare begins!
We own two properties, one has been the matrimonial home for 20 years ( jointly owned) the other I have owned for 32 years ( husband is on title deeds) I paid £32k for it in 1982, lived in it for 10 years then rented it out from when I married until last month, it is now worth about £500k. If I were to sell it in the future, would I be liable to CGT and how much as it would be my PPR?
My husband will remain in the Matrimonial home.
Any thoughts or comments on this unsettling situation would be welcome .
Thank you.
Mary
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Member Since January 2011 - Comments: 12193 - Articles: 1396
12:34 PM, 8th May 2014, About 12 years ago
Hi Mary
It isn’t as bad as you might think.
I’ve been there, done that and I still got the tee-shirt! ….. and lots more besides 😉
Please see the article I wrote entitled “Divorce Advice for Landlords” >>> https://www.property118.com/divorce-advice-for-landlords/44748/
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Member Since July 2013 - Comments: 561
2:18 PM, 8th May 2014, About 12 years ago
The agreed settlement just has to take CGT it into account. However there is no way to know how much the CGT is until you sell it, as the date of sale, sale price and most likely changed to the CGT rates will all effect it.
So it may be cleaner to sell it rather then move back in.
Member Since January 2011 - Comments: 12193 - Articles: 1396
3:04 PM, 8th May 2014, About 12 years ago
Mary
Also see this article on how to reduce the CGT on a rental property you have lived in at some time >>> https://www.property118.com/capital-gains-tax-relief-on-a-property-you-have-lived-in/
Also note that I provide a Consultancy Service if you would like to discuss your affairs more privately – please see >>> https://www.property118.com/consultancy-mark-alexander/61522/
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Member Since May 2014 - Comments: 1
4:18 PM, 9th May 2014, About 12 years ago
I have had a very bad experience in the past not unlike this. There are things you can do to help:
Live in it for as long as you can to build up a higher proportion of PPR years.
CGT rates vary over the years, so sell it at a favourable time.
Sell it during a year when your other earnings are low or even non existent. The gain is added to your other earnings.
You could make improvements (not repairs) as the cost of these could be deducted from the gain.
I had to pay massive CGT. It is unfortunate there are no allowances for this kind of situation.
Good luck
Member Since January 2011 - Comments: 12193 - Articles: 1396
4:41 PM, 9th May 2014, About 12 years ago
Reply to the comment left by “Cathy James” at “09/05/2014 – 16:18“:
Hi Cathy
Presumably you claimed your Lettings Relief as well as PPR relief?
See >>> https://www.property118.com/capital-gains-tax-relief-on-a-property-you-have-lived-in/
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