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bigduckontax
bigduckontax, Accountant
Category: Tax
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3 years ago my ex husband bought a property for me in his name,

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3 years ago my ex husband bought a property for me in his name, I paid the deposit but I had a a bad credit so his mortgage passed and we bought it In his name. the property was bought for me and my children to live in. he has never made any profit out of it I just paid the mortgage payment in his account. we are now considering to sell the property as I am now relocating.if the property sold we do make 35k profit. do we need to pay any tax. he does have 2 more properties in his name one he resides in and the other he lets out.
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.

Hello, I'm Keith and happy to help you with your question.

The property is in his name and he will be liable for Capital Gains Tax (CGT) on the 35K gain. The gain is calculated by taking the acquisition price plus the costs plus any enhancements eg new kitchen, installation of central heating, double glazing etc to arrive at a buying price. take the sale price less selling costs and the difference is the gain for CGT purposes. This is taxed at 18% or 28% or a combination of the two rates depending on his income plus the gain in the year of sale. From this gain can be deducted his Annual Exempt Allowance of 11K. From the figures quoted the worst case scenario is a CGT bill for him, not you, of 35K - 11K = 24K @ 28%, a tad under 7K tax.

Sorry to have to bring the news you perhaps did not want to hear, but that is the reality of the situation in tax terms. No tax liability devolves upon you personally.

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