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bigduckontax, Accountant
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Hi, I have a question on UK Capital Gains Tax with respect

Customer Question

Hi, I have a question on UK Capital Gains Tax with respect to my divorce and the sale of the former matrimonial home.
The divorce was finalised in June 2011, I had moved out of the house prior to that in around February 2011. My ex-wife continued to live in the home with our 2 children. In July 2013 she remarried and in January of 2014 moved into a new home her husband had purchased solely in his name. I then moved back into the former matrimonial home.
In September 2014 we agreed a consent order saying the house should be sold and the proceeds split. I also moved out of the house into rented accommodation leaving it empty. The house is now under offer but I have just received a letter from our conveyancer warning us we may be liable for CGT and reading around the web I can't work out whether I or my ex wife are liable or not. Can you give any guidance?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question.
Please advise, was this house owned by you, your wife or jointly?
Customer: replied 2 years ago.

It was owned jointly

Expert:  bigduckontax replied 2 years ago.
I totally agree with you. I can see no logical reason why CGT applies in this case. I would be inclined as a first stage to ask the conveyancer from whence he derives this remarkable contention.
Either he or she occupied the residence on and off until September so Private Residence Relief (PRR), which relieves 100% of the gain from CGT, would appear to apply. In any event the last 18 months of ownership don't count and the vendor is deemed to be in residence even if this is not the case. This brings the dates back to say 30 June 2013 if you get my drift and your wife, one of the joint tenants of a tenancy in common, the legal term for a jointly owned property, was actually in residence then, thereby emphasising the entitlement to PRR.
This is covered by HMRC Help Sheet 281 which I am sure you have read and this pamphlet appears to confirm this entitlement.
I hope I have been able to confirm your thoughts on this matter.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3607
Experience: FCCA FCMA CGMA ACIS
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Expert:  bigduckontax replied 2 years ago.
Thank you for your support.

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