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bigduckontax
bigduckontax, Accountant
Category: Tax
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Background - I am in the process of separating from my wife,

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Background - I am in the process of separating from my wife, we were going to divorce but following my wife having cancer, we decided to separate only for the time being to ensure that if my wife had a recurrence of cancer I would get her pension to ensure I could look after our 3 children (my wife earns more than me). My wife had a property solely in her name left to her by her sister, which until the end of last year, she was renting out. To avoid selling the matrimonial home as part of the divorce/separation agreement we agreed for her to transfer the deeds for this property into my name - which I will then sell without living in it, to raise money (house value approx.£110,000) for a deposit for a house for me nearer to the children's school. Could you tell me, under these circumstances, how much Capital Gains Tax I would be liable for?
Submitted: 11 months ago.
Category: Tax
Expert:  bigduckontax replied 11 months ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. Before I can fully address your question I need to know the probate value of the house left to her by her sister.
Customer: replied 11 months ago.
£100000
Customer: replied 11 months ago.
Do you require any further information?
Expert:  bigduckontax replied 11 months ago.
Your gain is 110000 - 10000 = 10000. Your Annual Exempt Amount (AEA) is 11100 so there is no gain to tax and no CGT to pay. I do hope that you have found my reply helpful.
Customer: replied 11 months ago.
Does this AEA apply even though the house passed from my wife being the sole name on the deeds to me being the sole name on the deeds & neither of us having lived there?
Expert:  bigduckontax replied 11 months ago.
Your AEA is a non cumulative benefit, a use it or loose it allowance [HMRC speak]. You each have an AEA so whichever way this cat jumps there will be no CGT exposure.
Customer: replied 11 months ago.
Just to be absolutely clear on this - neither of us having lived there has no bearing on this (Private Residence Relief) just the AEA & this would £0 or negligible depending on the accuracy of the probate & sale valuations up to a gain of £11,100 this tax year?
Customer: replied 11 months ago.
Also am I right in thinking that there is no CGT as this is a gift between wife & husband?
Expert:  bigduckontax replied 11 months ago.
Er, no, whilst there are usually no tax consequences with inter spousal transfers you do take on the CGT position, but as the overall gain falls below the AEA there is no tax due anyway. You have the AEA situation to a T!
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3369
Experience: FCCA FCMA CGMA ACIS
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Expert:  bigduckontax replied 11 months ago.
Thank you for your support.

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