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TonyTax
TonyTax, Tax Consultant
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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My husband and I seperarated after 28 years in November 2014,

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My husband and I seperarated after 28 years in November 2014, we are currently in the mediation process. My husband wants to transfer the ownership of our house to me so that my son and I are okay. I would still owe £100,000 approximately on the mortgage and will need to remortgage, which I have been assured I will be able to do. If this happens I am concerned that there would be tax implications for me (capital gains?). Is this so and if so approximately how much could this be. Our home is worth approx £160,000, we purchased it 18 years ago and I am a basic rate tax payer.
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi.

I'm taking a look at this and will post my answer in a short while.
Expert:  TonyTax replied 1 year ago.
Hi again.

Neither you nor your husband should have CGT problems if your husband transfers his share of the matrimonial home to you.

Normally, transfers of assets between married couples who are living together are done on a no gain, no loss basis and the same principle applies in the tax year that a couple separate. The tax year in which you separated ended on 5 April 2015 so that any transfer will be done at market value which could, in some circumstances pose a CGT problem for your husband. However, his "gain", albeit a paper one will be exempt from CGT so long as he lived in the property from when it was first bought and he disposes of his share to you within 18 months of his moving out. Therefore, so long as he does that by around May 2016, there should be no tax problems for him.

You won't have a CGT problem because you aren't selling the property.

Take a look here for more information. The final 36 months of ownership relief that the helpsheet refers to only applied for disposals up to 5 April 2014. Somebody in HMRC has made a drafting error.

I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.
Thank you for that, can I ask one more thing, if he transfers the property to me as described before and I had to sell the house after a year or two because I couldn't afford the upkeep, would that be a problem for me tax wise?
Expert:  TonyTax replied 1 year ago.
No, it wouldn't. Assuming you would have lived in it as your main home for the entire period of ownership or you sold it within 18 months of moving out, there would be no CGT to pay.
Customer: replied 1 year ago.
Thank you so much!
Expert:  TonyTax replied 1 year ago.
Thanks and good luck.

Would you kindly rate my answer before you leave the site please.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15886
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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