How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Sam Your Own Question

Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13712
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
16196420
Type Your Tax Question Here...
Sam is online now

My ex wife and I bought our property in 1986 £56,000.

Resolved Question:

My ex wife and I bought our property in 1986 for around £56,000. It now estimated to be worth £505,000.We were divorced in 2002 and the court on a 70/30 split with my ex-wife getting the 70% I lived in rented accommodation until I bought a flat in 2007 for £180,000 on an interest only mortgage.I currently pay a mortgage of £630 per month..I lived in it until January 2010 since when I have let it and moved in with a friend. Will I have to pay capital gains tax on my share of the sale?
Submitted: 1 year ago.
Category: Tax
Expert:  Sam replied 1 year ago.
Hi
Thanks for your question - I am Sam and I am on one of the UK tax experts.
I am afraid the answer is yes, as you went on to buy a further property which became your main residence, (although I appreciate it is not now) and you can only have one main residence.
Had you remained in rented accommodation and the split had been legally recognised with papers drawn up from the tax year in which you separated (not the year of divorce) then there would have been consideration of your share of the sale being eligible for relief from capital gains.
As matters stand - you will get credit for the time you lived there plus the last 18 months of ownership/total period of ownership s your share of the gain.
The first £11,100 will be exempt from capital gains (as this is your annual exemption allowance) and the remaining gain will be liable to capital gains tax.
The rate is determined by your usual annual income. If in excess of £41785 a year then your gain will all be liable at 28%. If your annual income is less than £41785 - then some of the gain (the equivalent of the unused rate band) will be liable to 18% and the remaining gain at 28%.
You should declare this gain on the relevant self assessment tax return.
Let me know if I can be of any further assistance
Thanks
Sam
Customer: replied 1 year ago.

Thank you Sam.Would it make a difference if I sold the flat I now let or buy another property with the proceeds of the sale of the house?

Expert:  Sam replied 1 year ago.
Hi
Thanks for your response
None at all I am sorry to say as this is not a business asset so does not qualify for any roll over relief or additional considerations.
And the sale of the flat now, would not change what had been.
I wish there was someway this tax position could be mitigated but I am afraid the gain arises on the basis of what took place, and that,s what is looked at to determine the tax position.
But that aside, unless any agreement had been made (legally) in the tax year of separation then there still would always have been a capital gain consideration (exactly as arises now) for the sale of this ex marital home.
Let em know if you have any further questions, but it would be appreciated if you could rate me (or click accept) for the service I have provided.
Thanks
Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13712
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
Sam and 2 other Tax Specialists are ready to help you

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.com/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.com/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    2333
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.com/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.com/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    270
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.com/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions