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TonyTax
TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I have a mortgage free family home which moved into in 1987

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I have a mortgage free family home which moved into in 1987 £55k)and moved out of in 2011 when husband and I separated. we retained joint ownership and both have stayed there intermittently whilst our adult son been living there. I moved into rented home and then took a mortgage on second home with new partner in 2012.
I want to understand capital gains implication and mitigate this when sell 1st home(worth £295k) which now ex-husband and I still own.
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi.Can you tell me which month in 1987 you bought the property, confirm it has always been owned jointly with your ex-husband, the month in 2011 you moved out and the month in 2012 you bought a new property. Did your husband move out? If so, when exactly (month and year)? What do mean by "have stayed there intermittently" exactly? Has your ex-husband bought another property? If so. when exactly (month and year)?
Customer: replied 1 year ago.
Bought on joint mortgage in Dec 1987. Moved out in august 2008 (apologies prev email incorrect) and went into rented accommodation until feb 2012 . Ex husband remained in the home with our son. Husband moved out (didn't buy or rent) possibly Jan 2010. Son stayed in our home and I stayed on and off....not for fixed periods or regularly. My new home is in Cardiff so whenever in london for work I'd stay at my home with my son.
Because it's been a family home it is hard to be precise on dates as I've always had keys, as has ex husband . Hope that helps and thanks
Customer: replied 1 year ago.
Apologies. Always been jointly owned by ex husband and I throughout the period 1987 til mortgage paid. Sale proceeds will be split 50/50.
Expert:  TonyTax replied 1 year ago.
Thanks.
Leave this with me while I draft my answer. It will take a while so please bear with me.
Expert:  TonyTax replied 1 year ago.
Hi again.
You should refer to HS283 as part of this answer:
https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief
If you sell the property for £295,000 having paid £55,000 you will make a gain of £240,000, £120,000 for each of you and your ex-husband. The costs of buying and selling the property will reduce the gain further (legal fees, survey fees, stamp duty, selling agent fees etc).
YOU
Total period of ownership to December 2015 337 months
Total period of occupation 249 months to August 2008
Total period of non-occupation 88 months
Exempt gain £95,074 (£120,000 / 337 months x 267 months (249 + last 18 months)
Non exempt gain £24,926 (£120,000 / 337 months x 70 months (88 - last 18 months)
Annual CGT exemption £11,100
Net taxable gain £13,826
YOUR EX-HUSBAND
Total period of occupation 266 months to January 2010
Total period of non-occupation 71 months
Exempt gain £101,128 (£120,000 / 337 months x 284 months (266 + last 18 months)
Non exempt gain £18,872 £120,000 / 337 months x 53 months (71 - last 18 months)
Annual CGT exemption £11,100
Net taxable gain £7,772
There are two rates of CGT, 18% and 28%. The rate or combination of rates that you will each pay will be dependent on the level of your respective incomes in the tax year of disposal of the property.
I hope this helps but let me know if you have any further questions.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15840
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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