sale of rental home-partof divorce settlement

16956be · Postby **16956be** » Wed Jan 09, 2008 1:19 am

i was marrid and had a house i owned before i was married and had lived in myself for 5 years.
When i married, i rented it out for 7 years.
I divorced in spetember 2006 and as part of my very amicable settlement, i took over the marital home (bought out my husbands equity) and the the house i rented out, was sold to my husband.
i bought the house for 34000. when i sold it to him it was worth 60,000, so to share the equity it was sold to him for 47,000. Do i pay caital gains on this? It had been my only residence for a long time, and it was part of the sharing of out assets at divorce. I believe there is also a tax free amount on this too? Please can anyone give me a definitive answer as i have had a lot of info and im confused!

Peter D · Postby **Peter D** » Wed Jan 09, 2008 1:36 am

You relly need to apply dates i.e. at least MM/YYYY but on the face of it with Indexation, PPR exemption( 36 months ), letting relief and Taper Relief there is no CGT applicable after using a few tens of pounds of your CG allowance. Hope that puts your mind at rest: hear are the figugure based on the brief facts you have provided. :
Capital Gains Summary

Purchase Price Â£34,000 14/05/1994
Indexation 0.124 Â£38,216
Legal Fees Â£0
Sale Price Â£60,000 14/09/2006
Enhancements Â£0
Legal Fees Â£0
Gross Gain Â£21,784
PPR Relief Â£13,983 Â£7,801
Letting Relief Â£7,659 Â£142
Taper Relief 35% Â£92
CG Allow'ce 1 Â£9,200 -Â£9,108
CG Bill Â£0

Regards Peter

snettergal · Postby **snettergal** » Thu Jan 10, 2008 10:19 am

Without wishing to be pessimistic, I would have thought the I.R had more about them than to accept things as stated.
I find it hard to imagine a house costing 34k having a value 60k in 12yrs.As the transaction is not at arms length and the settlement amicable I would have thought they would value the house in question.
It maybe quite different to how it appears and I have no idea how sharp the I.R are as I only know what I read here.

Peter D · Postby **Peter D** » Thu Jan 10, 2008 1:51 pm

The OP states it was worth Â£60K so assuming that was the real OMV then the zero CGT stands. perhaps the house was run down or tenanted. Over that time period as an average across the UK the house value may have risen to Â£110,000 or so. We await a reponse from the OP. Regards Peter