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bigduckontax, Accountant
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I am separated, my husband has sold the matrimonial home, I

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I am separated, my husband has sold the matrimonial home, I have been living in our 2nd house in my own name, what capital gains tax will I need to pay on the funds I received from the house sale/financial settlement from the matrimonial home? please
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
The CGT position is entirely time related.
Here is the advice from the National Family Mediation:
'The general rule is that a "main residence" is exempt from capital gains tax on sale. Married couples are allowed one tax-free main residence between them. If a person changes his or her main residence, historically the last three years of ownership of property one continues to be tax-free, after the purchase of property two, even if property one is not then occupied as the person's main residence.
However, with effect from 6 April 2014, the "last three years'" rule is to halve, so that tax is potentially due if the property is not occupied by its owner for more than 18 months before being sold. This potentially changes the maths, and so people not occupying the former matrimonial home should assess their position.'
So if contracts were exchanged within the 18 months of your vacating then there would be no Capital Gains Tax (CGT) liability. Once the 18 month limit is breached then there will be a CGT liability for a proportion of the gain made on sale, but you would be entitled to Private Residence Relief (PRR) for the period you occupied the matrimonial home. sSy you lived there 20 years and the sale was 3 years after you left than the proportion exposed to tax would be 1.5 / 23 = say 6.5%. You do have an Annual Exempt Amount (AEA) of 11.1K to offset any gain.
I do hope my reply has been of some use to you.