CGT Liability after selling a house

[ChrisWebb]

Hi,

My ex-wife and I have just sold an investment property after a divorce.

Sale price 260k

We paid the outstanding mortgage (113k) and after various disbursements to estate agents and solicitors there is £142k left which a solicitor is holding onto pending CGT liability calculations etc.

We will then look to pay off the mortgage on the current family home, where my ex-wife and our children are living. The outstanding mortgage on that property is approx £100k.

This leaves about £42k, which my ex wife and I were looking to split - AFTER paying our CGT liability. I'm looking around the internet and using various different calculators - and coming up with wildly different figures. I've also read that investing the gains in a property (i.e., paying off a mortgage) will reduce the overall CGT liability in this case, but i'm a bit unclear.

What exactly is my taxable gain in this case - is it £260 (sale price of the house), or is it whats left after i've paid the mortage/mortgages off?

I've approached a tax advisor who has suggested that my ex-wife and i need separate tax returns and is looking to charge a fee of nearly a thousand pounds to do the assessment and discharge the CGT liability - which i'm fine with - as long as i'm not getting ripped off.

Any advice would be gratefully received.

Thanks
Chris

[maths]

Not sure about your numbers.

Assume you own the house beneficially 50/50.

Capital gain on sale of property is sale proceeds (say 100) less original cost (say 40) ie 60. Ignoring expenses.

Each of you them have a gain of 30.

CGT levied on 30 less an annual exempt amount (11,700) giving say 18,300.

CGT levied at rates of 18/28% depending upon your income tax position.

Mortgage repayments nothing to to with calculation of CGT.

[Julie1111]

Seems very expensive, I was hoping to pay about £100 for a specialist to do mine but will probably do or myself now I have instructions as below..
"People need to know how much you paid for the house, what expenses that are allowable have been paid out including estate agent fees certain types of building and renewal work, solicitors.
Then you take that figure from what you sold the house for. What's left you split in two if 50/50 with your wife. You are each allowed £11,700 so take that from each half. What's left is taxed at one of the two rates already mentioned depending on what other income you each have. Then go to the realtime capital gains page and follow the instructions to register, if you're not already, and fill out the forms that walk you through. If the tax man is not happy with your calculations he will soon put you right . "
Well it looks pretty simple and as I am on self assessment I'll be doing it next tax year on my self assessment form.
Be interested if anyone has done it and found it any different

[wamstax]

Suggest you do it as soon after the 5th April as you can do so that you know if there’s a problem in your calculations as soon as possible and also start HMRCs 12 month window of opportunity for enquiringly into your return and calculations

[wamstax]

Just as a side thought if you and your wife ever lived in the Property as your sole main residence then there could be the opportunity for certain tax reliefs given such occupation and presumably letting so then you’re probably best getting and paying for a specialist