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Where Taxpayers and Advisers Meet

Property and divorce

Sandra642
Posts:5
Joined:Wed Mar 07, 2018 11:32 pm
Property and divorce

Postby Sandra642 » Thu Mar 08, 2018 8:11 pm

My husband and I separated 10 years ago and we are only now going through the formal divorce and financial settlement process.

The matrimonial home was sold and we each purchased a new house. We retained a 50% share each in a BTL property. It is now proposed that, as a financial settlement, a property adjustment order in regard to the BTL property would be made in my favour.

A). Would I be exempt from the additional 3% stamp duty on the new 50% share, bearing in mind it is an investment property, not the former matrimonial home?

B) If the property is transferred into my name when would cgt become duty on the 50% that is transferred, eg on the date the transfer is made? Would this liability fall to me or to my husband?

C) the BTL property Is currently jointly mortgaged. Would it be possible to retain the current mortgage or would this need to be redeemed and a new mortgage taken out (the current mortgage is an exceptionally low %age interest rate)

SDLT Geek
Posts:232
Joined:Sun Apr 30, 2017 5:45 pm

Re: Property and divorce

Postby SDLT Geek » Thu Mar 08, 2018 11:47 pm

On question (a) for SDLT, I would expect the exemption for property transfers on divorce to apply to your acquisition. That might not be needed if there is no "chargeable consideration" given by you for the half share. Are you paying for it? Or is it subject to a mortgage?

Sandra642
Posts:5
Joined:Wed Mar 07, 2018 11:32 pm

Re: Property and divorce

Postby Sandra642 » Fri Mar 09, 2018 8:27 am

Thanks for your reply.
The property is subject to an interest only mortgage. I would not be paying anything, simply a straightforward transaction where his 50% is transferred into my name giving me 100% ownership

SDLT Geek
Posts:232
Joined:Sun Apr 30, 2017 5:45 pm

Re: Property and divorce

Postby SDLT Geek » Fri Mar 09, 2018 11:49 am

It sounds as if the chargeable consideration will be half of the amount of the mortgage. Is that high enough to result in an SDLT charge?

If so, do you expect to qualify for the relief on divorce? See Finance Act 2003 / Schedule 3 / para 3.

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: Property and divorce

Postby maths » Fri Mar 09, 2018 10:13 pm

No SDLT should be payable even if there is a mortgage on the property as it would seem that such a transfer is part of the divorce proceedings.

Any CGT charge is a liability of the transferor.The date of the disposal is normally the date of agreement under which the transfer is effected. However, it could be the date of any court order if it is transferred thereunder or the date of the decree absolute if this is later than the date of the court order.

Sandra642
Posts:5
Joined:Wed Mar 07, 2018 11:32 pm

Re: Property and divorce

Postby Sandra642 » Sat Mar 10, 2018 1:49 pm

Thank you Maths


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