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bigduckontax
bigduckontax, Accountant
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Can you help with this CGT question please? I am in England.

Customer Question

Hello
Can you help with this CGT question please?
I am in England. Divorced in 2013, left former marital home and bought a new property. I have a legal charge on the former marital home for 30% of net sale price, various trigger points specified.
It is a legal charge at land registry, and detailed in the Consent Order - it is not a Mesher Order.
I bought my second property 3 years ago, so too late to change election.
My question: when my ex spouse settles the legal charge (the house will not be sold, but they will pay what is used) will it be liable for CGT?
Or is it exampt because it is a divorce situation with a trust created via the Consent Order and the property transfer considered settled even though the money has not changed hands?
Thank you!
Submitted: 1 month ago.
Category: Tax
Customer: replied 1 month ago.
if CGT is payable, is it the gain since original purchase (2007) or since the legal charge was added (2013)?(less the c£11K allowance)
Expert:  bigduckontax replied 1 month ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

A charge on a property and its subsequent redemption is not a transaction liable to Capital Gains Tax (CGT). On this matter the charge is on all fours with a mortgage which similarly not within the CGT ambit.

I do hope that you have found my reply of assistance.

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