CGT on property after separation

[MickyFitz]

Hi all,

on 3rd April 2003 my husband signed over our house to me as part of an amicable, no Court, agreement on his decision to leave me. He was resident in the property throughout, save for often working away. On the 5th of April 2003, he left, never to come back. Am I right that in when I eventually die, that the house will not be subject to CGT?

Could someone explain why, or why not, etc?

Kindest Regards, MF

[someone]

The rules may well change, but as of right now:

If it's been your only or main home throughout the period of ownership then there is no CGT on disposal

So your husband had no CGT when he gave his share to you.

And you will have no CGT if you dispose of it because it's been your main home throughout your period of ownership too. (I assume)


However, you say "when I die" - that's a different thing. At death CGT gains are wiped out anyway, so even if you did have CGT to pay if you sold, at death the CGT disappears and IHT comes into the calculation instead.

(It's one of the things that I think is most likely to be removed in the upcoming budget - if the first spouse to die can be predicted (e.g. terminally ill) then there can be a huge tax advantage to a husband and wife transferring all assets to the terminally ill one before death, so that the other gets them back (inherits) at OMV and no IHT either)

[MickyFitz]

Hi,

Thank you so much for the reply. The truth is I am terminally ill and may only have 6-8 months left.

I was unsure about the previous rules about being given my husband’s half of the house back in 2003, and the implications of him leaving on 5 April in that tax year. I may have misunderstood things that I have read but it would seem I will only get stung on IHT then? Notwithstanding the Labour budget soon to land.