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Where Taxpayers and Advisers Meet

CGT on property sale after divorce

levers2
Posts:6
Joined:Mon Oct 15, 2012 6:41 pm
CGT on property sale after divorce

Postby levers2 » Thu Nov 02, 2023 11:29 am

My wife and I jointly bought our home in 2005. We separated in July 2021 and I moved out into rental accommodation and she continued to live in our joint home. We have since divorced and are now selling the property and will get half each. I've been told I might have to pay CGT on the profit from the time i moved out until the sale completes, even though I don't own any other property. Is this the case? If so, how much am I likely to have to pay? We bought it for 461k in 2005 and are now selling it for 750k. I'm not sure what it was worth at the point of leaving in 2021, but probably a bit more than we're selling it for now. Thanks

pawncob
Posts:5099
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: CGT on property sale after divorce

Postby pawncob » Thu Nov 02, 2023 1:08 pm

Capital gains on PPR are time apportioned on a monthly basis, so a very rough calculation gives a gain of c£10k.
This could result in tax being due on c£4k at your highest rate of tax (maximum 28%)
With a pinch of salt take what I say, but don't exceed your RDA

levers2
Posts:6
Joined:Mon Oct 15, 2012 6:41 pm

Re: CGT on property sale after divorce

Postby levers2 » Thu Nov 02, 2023 4:01 pm

Thanks. Would this be easy enough to calculate / submit by myself to HMRC or would I be advised to get an accountant to do it? I've been quoted £600 by an account just to give the initial tax advice and then it would be more on top to do the paperwork. Is this reasonable?

pawncob
Posts:5099
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: CGT on property sale after divorce

Postby pawncob » Thu Nov 02, 2023 5:42 pm

Sounds excessive for half hour's work.
https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief-2023#calculating-the-gain-where-only-partial-relief-is-due
With a pinch of salt take what I say, but don't exceed your RDA

levers2
Posts:6
Joined:Mon Oct 15, 2012 6:41 pm

Re: CGT on property sale after divorce

Postby levers2 » Fri Nov 03, 2023 12:45 pm

Thanks again. One further question - I'd read that rules for the time after separation for CGT purposes was increased from 2 to 3 years in April. Does this apply to my case? I'm currently over 2 but under 3 years.


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