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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15915
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Married couple. Live apart in two separate houses after

Resolved Question:

Married couple.
Live apart in two separate houses after selling marital home.
Divorce never happened , we are friends , bought our houses from own capital
and don't share any amenities or services.
Do we have a potential cgt liability when selling ie are we only allowed one property free
Of cgt.
How do we minimise or avoid the problem, we bought our houses c three years ago.
Submitted: 10 months ago.
Category: Tax
Expert:  TonyTax replied 10 months ago.

Hi. My name is*****'m looking at your question now and will post my answer or ask for more information here in a short while.

Expert:  TonyTax replied 10 months ago.

When were the houses you each live in now bought in relation to the sale of the marital home? Did you not separate until the marital home was sold? If, not when exactly?

Customer: replied 10 months ago.
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.
Customer: replied 10 months ago.
My wife bought her house before the marital home was sold , around 3 months or so before, I bought mine around six months after it was sold with some of the proceeds.
Well we separated as the marital home was up for sale.
thanks
Customer: replied 10 months ago.
I am 69 years old , she is 67 ............just in case that is an issue.
If we had divorced no problem...what if we divorce now, we don't want to really
Expert:  TonyTax replied 10 months ago.

Thanks.

Leave this with me while I draft my answer.

Customer: replied 10 months ago.
Thank you............it is late , I am going to bed.......let's leave it 'til tomorrow or Monday.
Thanks .
Goodnight
Andrew
Expert:  TonyTax replied 10 months ago.

OK. The answer will be here tonight so you can see it tomorrow.

Expert:  TonyTax replied 10 months ago.

A married couple can only have one main residence between them unless they have separated in circumstances which are likely to be permanent. You and your wife appear to have done that. See HS283 here and HS281 here. When a property has been your main home you are given the last 18 months of ownership as a tax free period even if you aren't living there so, assuming that the property was your main home from when you bought it until you moved out, your share of any gain will be fully exempt from CGT.

As far as you are concerned, as you didn't buy your own home until after the marital home was sold and assuming it is your main home for the entire period of ownership (including a maximum of the last 18 months of ownership if you are not living in it in that period), then any gain from a disposal will be tax free.

As for your wife, the same exemption will apply to her share of any gain from the sale of the marital home. Assuming she lives in her current home for the entire period of ownership (including a maximum of the last 18 months of ownership if she is not living in it in that period), then only three months worth of the gain from a disposal will be taxable. So, the longer she lives in it, the smaller a proportion of the gain will be represented by the first three months of ownership.

I hope this helps but let me know if you have any further questions.

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