Hello, I'd appreciate advice on Capital Gains on divorce if possible given the rules have changed this year.
The situation is this: My husband and I are sadly getting divorced. We own a house and a maisonette. The plan is for me to keep the house as the children live mostly with me. My husband will keep the maisonette. We bought the maisonette in January 2003. At this point it was our residence and only property. In May 2007 we bought a second property after starting a family and moved into that. At which point we rented out the first property until May 2016 when my husband lived in the maisonette for three months whilst I lived in the second property - he was doing it up after squatters did some damage. In September 2016 we rented the maisonette out again and my husband moved back into the second property with me and the children. In July and August of 2020 my husband was living in the maisonette again during an initial separation period. In September 2020 he moved back into the family home until July 2021 when we finally split. He moved back into the maisonette in September 2021 and has been living in the maisonette as his main residence until now. He will continue to live in the maisonette as his main residence and plans to keep the property rather than sell it. We purchased the property for £239,000 in January 2003. It is now worth around £768,750.
The law on CGT has changed this April so CGT is no longer immediately due when divorcing couples are signing over assets. However, it is not clear cut how much I should pay to cover CGT as he says plans to keep it indefinitely.
These are the variables as I see them:
The situation is this: My husband and I are sadly getting divorced. We own a house and a maisonette. The plan is for me to keep the house as the children live mostly with me. My husband will keep the maisonette. We bought the maisonette in January 2003. At this point it was our residence and only property. In May 2007 we bought a second property after starting a family and moved into that. At which point we rented out the first property until May 2016 when my husband lived in the maisonette for three months whilst I lived in the second property - he was doing it up after squatters did some damage. In September 2016 we rented the maisonette out again and my husband moved back into the second property with me and the children. In July and August of 2020 my husband was living in the maisonette again during an initial separation period. In September 2020 he moved back into the family home until July 2021 when we finally split. He moved back into the maisonette in September 2021 and has been living in the maisonette as his main residence until now. He will continue to live in the maisonette as his main residence and plans to keep the property rather than sell it. We purchased the property for £239,000 in January 2003. It is now worth around £768,750.
The law on CGT has changed this April so CGT is no longer immediately due when divorcing couples are signing over assets. However, it is not clear cut how much I should pay to cover CGT as he says plans to keep it indefinitely.
These are the variables as I see them:
- Length of ex husband living there as his main residence before selling is unknown
- Property prices in London may go up or down
- Ex husband may invest in the maisonette which is a bit run down currently, and therefore the value may increase
- Ex husband is a 28% high rate tax payer now. He is 55 and if he retired before he sold the property he would be on the lower 18% rate.
- CGT rates may change over the coming years