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Sam
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Category: Tax
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If I remortgage the home and then pay wife equity share of

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If I remortgage the home and then pay wife equity share of the home then are there any taxes to pay if I pay her before or after decree absolute ?Also, are there any disadvantages if divorce finances are done after Decree Absolute?

Hi, Sam here , one of the UK tax Experts here on Just Answer, thank you for your question and I shall reply shortly

Hi

 

There could be capital gains

who lives at the property

Have either of you moved out when did this take place

When did you legally separate

Who will remain in the property as their main residence

 

I can advise further

 

Thanks

 

Sam

Customer: replied 9 days ago.
The house was bought by myself and I paid the mortgage off.
I live at the property.
We separated 30th March 2019 into separate bedrooms.
My wife had to leave the home due to Bail Condition after being arrested.
Currently, there is a Non-Molestation Order in place.

I will remortgage the property and pay her off. Me and our son will remain in the property as the main residence.
Customer: replied 9 days ago.
NOTE: I will not sell the property but to remortgage and pay her off.

Hi

 

Thanks you for the concise information and sorry that you have clearly been through a pretty horrible time

Then it matters now when you pay her as she was never named on the deeds so is making no capital gain due to the change of circumstances (just a gain that is not liable to any taxes) and you will never have any tax liability as this has been to date your main residence and as long as this remains so until any future sale then your gain will fully be exempt under the private residence relief exemption rules

 

Do let me know if I can assist further

 

Thanks

 

Sam

Customer: replied 9 days ago.
Just to point out that when I bought the property it was empty for first 6 months then rented out for 6 months, left empty for 5 years for renovations and then I moved in for 18 years until now and the future too.

So, to conclude, can we say that she will not be liable for any tax as part of the divorce whether before or after decree absolute ?

I will only have to pay tax if I sell the property now or in the future as it was not always my main residence ?

Hi so any consideration for capital gains will fall solely on you as sole owner if and when you sell in the future - at that time seek advise do you get all the reliefs you are due 9( on which the gain til now will be approx 6 years/total ownership - but then you will be due some private lettings relief as let out an I assume rents declared to HMRC

 

Thanks

 

Sam

Sam and other Tax Specialists are ready to help you
Customer: replied 9 days ago.
I shall give you 5 stars for your great advice.

I notice the last part of my question was unanswered :

So in the case of myself and my wife - then there are no tax implications if divorce finances are done before or after Decree Absolute (ie. it makes no difference) ?

HI I did advise it makes no difference see comment "Then it matters now when you pay her as she was never named on the deeds so is making no capital gain due to the change of circumstances (just a gain that is not liable to any taxes) and you will never have any tax liability as this has been to date your main residence and as long as this remains so until any future sale then your gain will fully be exempt under the private residence relief exemption rules"

This should have been typed as NOT - many apologies

 

Thanks

 

Sam

Customer: replied 9 days ago.
Excellent Response. Greatly appreciate your advice today. Have a great day!

You too and thank you for the accept.rating - much appreciated - Sam