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bigduckontax
bigduckontax, Accountant
Category: Tax
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I want to take my name Off the deeds of the house i jointly

Customer Question

I want to take my name Off the deeds of the house i jointly owned with my ex-wife. We have been separated 19 years and divorced 13yrs. She has continued to live in the house since. I am in rented accommodation. Am I subject to CGT
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.

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

Yes, you are, it constitutes a disposal, but only for half the gain made on the purchase cost of the house and a net market value as at transfer date. This will be further abated by Private Residence Relief (PRR) for the time you occupied it. Take the total ownership time in months and your total occupation time ditto. Take one from the other and this figure over the total ownership time will be the proportion of the gain liable to CGT. You have an Annual Exempt Amount (AEA) of 11K (14/15 rates) to deduct also. CGT is levied at 18% or 28% or a combination of the two rates depending on your invome including the gain in the year of sale.

If your ex-wife paid rental to you you might be entitled to Lettings Allowance up to 40K instead of AEA. There is one consideration, the law on the subject is quite clear, PPR is avaliable for your sole or main domestic residence. Note the word 'or' not 'and.' HMRC love to apply the word 'and' and this was the subject of a huge public 'egg on face' in 1976 when the then Inland Revenue (IR) tried to hold that for military personnel in service accommodation their quarters were their 'sole and main domestic residence' and therefore were not entitled to PRR on their own homes. IR lost hands down on this one. If this house is your sole domestic residence you might be able to swing it and escape CGT altogether.

It might be adviseable to engsge a trusted, local professional to hold your corner with HMRC on the ultimate disposal of your half.

I do hope I have thrown some light on your position should you change the deeds.

bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 2 years ago.

Thank you for your support.

By the by, you can read all about the tax complications on divorce or separation here:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/323663/hs281.pdf