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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4996
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I have been separated from my husband for just over three years

Resolved Question:

I have been separated from my husband for just over three years and we are talking about him transferring his half of the marital home to me. He has lived there, i moved out. I understand I would be liable for capital gains, is the capital gain calculated from the time I lived there (all of the time we owned the house), plus my 36 months of exemption - meaning that I would only pay tax on the gain since then (a few months) or will I be liable for the whole of the period that we have owned the house? It makes a big difference to the capital gains bill, obviously
Submitted: 3 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 3 years ago.
Hello and welcome to the site. Thank you for your question.

Please clarify for me... are you going to be the recipient of his half share of marital home.
Is it your intention to retain the property ofr will you be selling it?

Many thanks
Customer: replied 3 years ago.
Yes I am going to be the recipient of his half of the marital home (he is having the receipts of another property which is not the natural home but won't be subject to capital gains. My intention is to rent it out in the immediate future, but I may live in it at some point in the future. I will eventually be selling it, but not within the next year or two unless MIT is impossible to let out
Expert:  taxadvisor.uk replied 3 years ago.
Thank you for your prompt reply.

First of all, you as a recipient of the half will not be taxed on any capital gain to date as you are increasing your share from 50% to 100%.

If you make this property your main residence once again and live in it, then all period covered as main residence would be exempt from CGT under private residence relief.

The valuation of property at time of transfer to you would become the new cost price and will be used to work out any gain in the future. You are right in that CGT will be calculated based on any access of period over main residence plus last 36 months as it was your main residence at some point during ownership.
Once you make it your main residence and after time you were to move out and let the property you would also qualify for letting relief.

More information on these topics are covered here
http://www.hmrc.gov.uk/helpsheets/hs281.pdf
and
http://www.hmrc.gov.uk/helpsheets/hs283.pdf

I hope this is helpful and answers your question.


If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.


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Customer: replied 3 years ago.
Thanks very much that's very helpful. Could You just clarify the first sentence - are you suggesting that I won't pay any CGT on the transfer of his half even though I have not lived there for more than 36 months? I'm not entirely clear on this. If I understand this right, assuming that there is an excess period of. 6 months, that I would pay CGT on that six months. Since I have lived there since 2000, And the total gain has been about 240k, the gain in that 6 months would be something like 1/27 x 120, which would give me an amount inside the years allowance
Expert:  taxadvisor.uk replied 3 years ago.
Thank you very much for your reply.

As you are not selling your share of the property there is no gain for you. You are effectively taking over the whole property and CGT will come into play for you when you dispose of the property at a future date.

I hope this is helpful and answers your question.
Expert:  taxadvisor.uk replied 3 years ago.
I thank you for accepting my answer.

Best wishes.