- Home
-
Tax News
- Budgets and Autumn Statements
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings & Investments, Pensions & Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations & Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practice and Methods
- Professionals in Practice & Industry
- General
- TaxationWeb
-
Tax Articles
- Budgets and Autumn Statements
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings and Investments, Pensions and Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations & Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practice & Methods
- Professionals in Practice & Industry
- General
- Tax Tips
-
Tax Forum
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings & Investments, Pensions & Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations and Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practices & Methods
- Professionals in Practice & Industry
- General
- Tax Jobs
- Get in Touch
Where Taxpayers and Advisers Meet
CGT on Property after divorce
-
elizabeth54
- Posts:1
- Joined:Wed May 10, 2017 5:04 pm
I divorced 20 years ago. My ex stayed in the house but I retained joint tenancy of the property. The house is now being sold and I have accepted an offer amounting to approximately 15% of the equity as a final financial settlement. Am I liable for CGT on the total equity or just my share ?
Re: CGT on Property after divorce
I think you will be liable to CGT on your share of the property that is being disposed of - which isn't necessarily the same as the share of the equity you are receiving.
If, as a result of the divorce settlement, you owned 15% then you will be liable to CGT on 15% of the gain (after allowing for any PPR you might have had originally). (Your ex probably has no CGT liability on their share as it will presumably have been their PPR)
But if you still owned 50% but are now gifting 35% to your ex as part of the final settlement then you will pay CGT on 50%.
OTOH, if you owned 5% but your ex has agreed to give you 15% in order to get rid of you from his life then you will only pay CGT on your share and the extra 10% will be taxable on your ex.
I think it will depend very much on what was in any divorce agreement originally. If, at the time of the divorce, your ex agreed to take on all liability for the mortgage then it might be possible to argue that you no longer owned 50%. If you are receiving 15% of the equity but the mortgage is 50% LTV then it might be possible to argue that you own 7.5% of the property which you are entitled to on disposal before any deductions for paying off the mortgage.
If, as a result of the divorce settlement, you owned 15% then you will be liable to CGT on 15% of the gain (after allowing for any PPR you might have had originally). (Your ex probably has no CGT liability on their share as it will presumably have been their PPR)
But if you still owned 50% but are now gifting 35% to your ex as part of the final settlement then you will pay CGT on 50%.
OTOH, if you owned 5% but your ex has agreed to give you 15% in order to get rid of you from his life then you will only pay CGT on your share and the extra 10% will be taxable on your ex.
I think it will depend very much on what was in any divorce agreement originally. If, at the time of the divorce, your ex agreed to take on all liability for the mortgage then it might be possible to argue that you no longer owned 50%. If you are receiving 15% of the equity but the mortgage is 50% LTV then it might be possible to argue that you own 7.5% of the property which you are entitled to on disposal before any deductions for paying off the mortgage.
