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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15940
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I separated from my wife in January 2013 and in April

Resolved Question:

Hello,
I separated from my wife in January 2013 and in April 2013 I moved out into rented accommodation, leaving her and some of our children in the home we bought in 2000 for £84,000. I continue to pay half of the mortgage.
The property is now valued at around £240,000 (my wife has a surveyor's valuation of £215,00 and I have a surveyor's valuation, carried out Sep 2015 of £240,000) with £53,000 outstanding mortgage. It was also valued at £240,000 in Jul/2013 by the same firm that visited in Sep 2015. There was no increase in value as the property has been allowed to deteriorate considerably.
My wife claims she will buy me out of the property, but I suspect that it will have to be sold.
We are currently working out a settlement figure, hotly disputed, which takes into account credit card debts, essential repairs to property since separation, division of my pension (she does not have one) etc etc.
I am extremely confused about Capital Gains Tax. Can you help, please?
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.Let me take a look at this and I'll get back to you in a bit.
Customer: replied 2 years ago.
Ok, I will check my emails about 6pm tonight and get back to you tomorrow.
Expert:  TonyTax replied 2 years ago.
Hi again.You should refer to HS283 and HS281 for information on the main residence, CGT and tax on separation and divorce as part of this answer.If the property is sold, the proportion of your share of any gain which is covered by your occupation of it and the last 18 months of ownership regardless will be exempt from Capital Gains Tax. So, if the property was sold today, you would have a taxable gain equal to about 10 months worth of your share of any gain. The annual CGT exemption is £11,100.If you sold your share of the house to your wife, you could claim relief from CGT under Section 225B Taxation of Chargeable Gains Act 1992 whereby the property would be treated as your main home until you sold your share to your wife, thereby exempting your gain from CGT. This really only works if you have not bought another property which you want treated as your main home. The family home itself has to be sold to your wife for a Section 225B claim to be valid, not a third party.There is information on working out your CGT rate here.I hope this helps but let me know if you have any further questions.
Customer: replied 2 years ago.
Am I correct to assume that the "gain" to me would be after I had deducted half of the £84,000 we paid for the property initially in 2000?
Expert:  TonyTax replied 2 years ago.
That's correct.
You take the disposal proceeds and deduct the purchase price, the cost of any improvements and the purchase and selling costs (legal fees, stamp duty, survey fees, selling agent fees, advertising costs, other minor disburnsements etc) to arrive at the gain. Your share of the gain will be 50%.
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