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 bigduckontax Your Own Question
bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3820
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

Background - I am in the process of separating from my wife,

Resolved Question:

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: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year 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 1 year ago.
£100000
Customer: replied 1 year ago.
Do you require any further information?
Expert:  bigduckontax replied 1 year 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 1 year 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 1 year 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 1 year 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 1 year ago.
Also am I right in thinking that there is no CGT as this is a gift between wife & husband?
Expert:  bigduckontax replied 1 year 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 and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 1 year ago.
Thank you for your support.

Related Tax Questions