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Where Taxpayers and Advisers Meet

CGT payable on ex family home?

stubear
Posts: 1
Joined: Tue Jun 12, 2018 8:33 pm

CGT payable on ex family home?

Postby stubear » Tue Jun 12, 2018 8:40 pm

Hi,

I have a question re CGT on 2 properties I jointly own with an ex partner. The situation is as follows:-

My ex partner and I (mother of my children but never married) split in 2008. At the time we jointly owned a few Buy to Let properties and the family home. I left the family home, and evicted a tenant so that I could move into one of the BTL flats. I have lived in the flat ever since (but looking to sell as I'm getting married next year to someone else).

My accountant advised me that I need to declare CGT on my half of the family home, and that my ex needs to declare CGT on her half of the flat I live in. However, I don't agree. I was under the impression that I walked out the family home, and let my ex have it to bring up our children, and in return, she let me fully own the flat I moved into. Therefore I don't feel that CGT should be paid by either of us on either property, as we have both lived in them alone since 2008.

At the time, I asked both mortgage companies to remove my name from her house, and her name from my flat. However, they both refused.

So since 2008, she has had sole use of the house and I have had sole use of the flat. We have sold off 2 other BTL properties since 2008, and we have declared the CGT. We also have 2 other BTL properties left (excluding her house and my flat which we fully intend to declare the CGT). I would like to sell the remaining properties off to enable me to move on and get married, and my ex is ok with this. Its just the CGT on her home and my flat that is the problem .

Can you advise if my accountant is correct, in that we both owe our respective CGT on our own half shares in the 2 properties, or that there is no CGT to pay?

Thanks and regards

SteLacca
Posts: 384
Joined: Fri Aug 07, 2015 2:17 pm

Re: CGT payable on ex family home?

Postby SteLacca » Wed Jun 13, 2018 9:53 am

What does land registry say? On the face of it, I would say that your accountant is correct, and you will each incur a CGT liability.

You may be able to make a case that each of you held your share of the property where you don't live in bare trust for the other, but it would be a hard sell to HMRC.

pawncob
Posts: 4107
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: CGT payable on ex family home?

Postby pawncob » Wed Jun 13, 2018 11:21 am

I agree with SteLacca. HMRC would not accept that you established bare trusts on separation.
With a pinch of salt take what I say, but don't exceed your RDA


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