Separating couple tax question

[cj_15]

My partner and I, unmarried, have recently decided to separate. We have a joint mortgage, and the intention is for me to buy her out of her share of the house - basically half of its profits from the last 6 years house boom - and have the mortgage transferred over to my name only. I have spoken to the bank that we are mortgaged with, and have been told that this is simply a transfer of equity process that incurs a small fee, together with a solicitor. They have also told me I can increase the mortgage amount to cover the payment to my partner. I specifically asked about Stamp Duty as I have read that this may be due, but was told that the property is not being repurchased as such so it is not payable. Is this correct, I've seen lots of variations of my question on the Internet and the answer always seems different.

If we are liable for stamp duty, would it be on the whole or half property value, or on the settlement amount.. as you can see I'm a touch confused. Also, from a CGT point of view, I understand we are not liable as it is/was both of our primary residence, but if we have come to a verbal agreement of a settlement fee, how does the tax office know money transferred is due to separation and house splitting rather than just a gift.

[Instinctive]

Someone with legal background will need to come in regarding the Stamp Duty issue. I would guess that the stamp duty will apply on the amount of equity which you are paying over to your partner. If this amount is below the limit (is this £60,000?), there may not be any duty to pay.
During the process of the transfer of the equity, you are required to complete a certificate, and also the deeds could not be registered with the Land Registry without the Stamp Duty certificate.

If the property is/was the only or main residence of both partners throughout its ownership, there is no Capital Gains Tax upon you buying out your partner. It does not matter if the Revenue know the true reason for the money transferred, ie due to separation and house splitting. I do not see any need for you to consider putting forward any other reason, eg a gift.

RP