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Capital Gains Tax

  • crabbman
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02 Apr 12 #321234 by crabbman
Topic started by crabbman
I purchased our former matrimonial home in November 1990 in my sole name. It was our family home until I left in December 1999. My ex-wife remained in the house with our 2 children as ordered by the court in an order signed in June 2002. We can now sell the house as my daughter has reached the age of 18 years. I purchased the house for £87,000.00 and it is selling for £250,000.00. My ex-wife will receive 60% gross (£150,000.00) as ordered by the court. After selling costs and mortgage repayment I recieve £90,000.00 giving me a profit of £3000.00. Am I liable for capital gains tax on any/all of the profit. The house is still in my sole name but I would have sold years ago if it was not an order of the court that I had to keep it. Is the 60% awarded to my wife taken into consideration by HMRC? Thank you

  • Young again
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02 Apr 12 #321329 by Young again
Reply from Young again
Hi Crabbman,

Sec 225 of The Taxation of Chargeable Gains Act 1992 could mean there is no tax for you to pay if your ex lived in the FMH as her principal private residence for the duration of the period from court order to sale of the FMH. I think this is still allowable under sec 226a of the same act introduced by the Finance Act 2004 but I''d advise you to read the sections and come to your own conclusions or to obtain professional advice.

I am not an accountant.

Good luck!

YA

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