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Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.
For the gain made on the land Capital Gains Tax (CGT) will certainly apply. Is the matrimonial home your sole or main domestic residence ie is it your only home?
You have an Annual Exempt Amount (AEA) of 11.3K to offset any gains. The gain on the land land will charged at 10% or 20% depending on the individuals' income including the gain in the tax year of sale. I cannot hazard a guess at this you have not disclosed the acquisition cost. As the matrimonial home is your sole or main domestic residence Private Residence Relief (PRR) will apply and that relieves CGT at 100%. PRR is given automatically.
Your gain on the land is 130K - 61K = 69K / 2 = 34.5K. Knock off the 11.3 AEA leaves 23.2K exposed to CGT at 20% = 4.64K tax due.
As the house is the only house you own Private Residence Relief (PRR) applies which relieves CGT at 100% when you dispose of your share.
If you make a capital loss on the house then you can use that loss to offset gains elsewhere or carry it forward.
No, because we are talking about the land which will always be subject to CGT irrespective of the marital status. However, the disposal price might reduce thus reducing the tax payable.
If the disposal price falls the gain is reduced also. Thus the tax burden is eased.
Yes, but remember she has an AEA also.
Actually the extension period was reduced from three years to 18 months some years ago.
This interpretation of the law is incorrect. Whilst it remains the only house you own the PRR applies irrespective of occupation. The wording is 'sole or main domestic residence' although HMRC tend to interpret this as 'sole and main domestic residence.' This is incorrect and their interpretation has been defeated endlessly over nearly half a century.
Thank you for your support.
I should be interested to hear why your accountant says that CGT will be due when it is your sole or main domestic residence! There is no worry regarding refuting HMRC's interpretation of CGT law. That Department has lost repeatedly over the years whenever challenged. The gain does not have to be declared at all. a note to the effect that the sole or main domestic residence has been disposed of will suffice.
No, with PRR the net gain is outside the scope of CGT.
No, because the gain would be calculated from the original acquisition price nd thus be a gain rather than a loss.