Help! Someone who’s good at maths, how much do I owe ExH?

[PuddleCake]

I’ve sold family home and we are splitting the profit (just the profit, not my equity) 70/30 to me. Ex and I have come up with different calculations….

House sold for 710k

I bought it for 327k (this included mortgage of 175k, I have £155k left to pay on it). Ex wasn’t on mortgage and didn’t put any money into sale.

I've spent 100k on renovations, this includes all legal and estate agents fees

Ex spent 27k on renovations

I owe ex 7k from previous house renovation

I forgot the £7k you owe your ex - so the totals above should be £7k less for you = £444K and your partner gets £7k more = £110, 800

The house cost £327K and it was sold for £710K. .

Your equity when you bought it ( your deposit) was £152K You still owe £155K on the Mortgage, so that needs to come off. Available cash is now down to £710K - £152K ( not profit) and minus the £155k to pay off the Mortgage. Now down to £403K

You owe your ex £7k as well, so that comes off the £403K - which leaves £396K

70% = £277,200 and 30% is £118,800

You get £277200 plus your deposit of £152K = £429200

Your ex gets £125,800

This ignores the money you both put in on renovations, which seems slightly fairer if you were both together when the renovations were done. Not clear about the money you owe your ex and whether the money owed is part of the £27k he put in on renovations, in which case it may not be payable either

If it was me, this is the one that I would consider as fair.

I would also subtract all interest you've paid on the mortgage and will be roughly paying on the rest, from the total profit before splitting it

Sold price is 710000
your equity in the house money through deposit and mortgage payments is the £172000
you then put in another £100000
So you get the first £272000

He gets back his £27000

And the mortgage company get their. £155000

so in total you have to split the remaining £256000 70/30

So you get £179200 and he gets £76800 profit

you walk away with your equity £172000, the £100,000 you put in for renovations and your 70% of the profit £179200 less £7000 that you owe him = £444200

He walks away with his £27000 and
30% of the profit £76800 plus the £7000 you owe him. = £110800

and the mortgage company are repaid their £155000

I would just give him back the £34k for the renovations. You don't owe him for the work he put in any more than he owes you for any cooking/cleaning you did for him.

Well I would say

710 - 155 remaining mortgage paid off leaves

555 cash, of which you paid 152 deposit + 100 renovations and he paid 27, so you both get your money back leaving

276 to split 70:30, so

193.2 you and 82.8 him

then you pay him the 7 debt leaving

you with £186,200
him with £ 89,800

Is there a prize for the winning answer?

Sale of house = 710,000
Less Mort )155k) = 550,000 pot

You extras
100,000 reno costs
152,000 original deposit
20,000 paying off mort
= 272,000

His extras
27,000 reno
7,000 reno
= 34,0000

550k pot

1st £278,000 to you
2nd £34,000 to him

Leaves £244,00 to be divided 70/30
Him: £73,200 + his £34k = 107,200
You: £170,800 + £272,000 = £442,800

Though I think you are being too generous. I would just give him the £34k

No idea, I only got a CSE grade 3 in maths!

My maths isn’t great but I think it’s £101,000 profit so taking into consideration the amounts spent on renovations and what you owe ex I think you get £163,700, ex gets £64,300.

I make it £74,700 to him and £174,300 to you.

Value now-purchase price= uplift in value, so 710-327 =383K

Uplift in value- renovation costs= profit
383-(100+27) = 256K

I then took off the 7K you owe him, but actually, that's nothing to do with this house, so it could be done separately...the difference in amounts is shown below:

256-7= 249K

249K÷100 = 2.45K

2.49K × 70 = 174,300

2.49K×30 = 74,700

But, (and this is probably the corect way to deal with the 7K from another property) if you don't inc the 7K you owe him from the other house, both your shares of the equity are higher, so:

256K÷ 100 = 2.56K

2.56K × 70 = 179,200

2.56K × 30 = 76, 800

Then you'd need to pay him his other monies owed on top, so he would end up with:

76800 + 7000 = £83,800

You could adjust this for the 70/30 split on the balance.

Also, probably better to remove the 127 for renovations at the start.

I do think you need to protect your deposit in the form of taking 46.5pc of the equity before you consider any other splitting.

If you treat the 7K separately, you would then have £172,200 left.

Could be something like this?

EeesandWhizz

There is only £155000 remaining on the mortgage so her equity is £327000-£155000 = 172,000

Don’t forget she has been making mortgage payments each month which has chipped away at the outstanding mortgage

I’m not happy with my previous answers at all and realise my sums were way off somewhere. (Will teach me for not writing things down properly)

I feel like like I’ve clarified my thinking a lot.

The OP had 46% equity when she bought the place. 46% of the new price is therefore her equity, so that’s roughly £327k. We put that to one side in OP’s pot.

Then the bank is owed £155k. That leaves £228k to be split 70/30 giving the ex £68.4k plus the 7k he is owed, so £75.4k.

OR

You take the OP’s £100k out of that £228k and give it to her and the ex’s £27k and give that back to him, leaving £101k profit to be split. The ex would then get £33.3k in addition to his £27k from earlier plus the £7k the OP owes him giving £67.3k.

OP, I think you are being more than generous.

My calculation:
The whole house was yours when you bought it, so profit is 710-327=383k

30% of 383k = £114.9k
minus half of renovations you paid (-50k)
plus half of his renovations (+13.5k)
plus 7k you owe him (+7k)

Total = £85,400

I think everyone has over-complicated it.

Profit is simply 710 - 327, minus all costs which will include mortgage repayments (not mentioned), the 100 you put in, the 27 he put in and selling costs.

30% of that figure to him, plus the 7 that you already owed him.

Because it is profit you are splitting then you have to deduct / repay the renovation costs and the outstanding mortgage and op’s equity first.

A lot of people are only taking account of the initial deposit and forgetting that the mortgage payments went partly to paying off the mortgage so the equity is the initial cost of the house less the outstanding mortgage

Also at the end when you add up who gets what, to check you are correct it has to add up to £710,000.

I got the £110.8k as per previous posters.

Sale 710 - 327 = 383 profit
less renov 127k spends = 256k.
30% 76.8k to him,
70% 179.2 to you

His = 76.8 profit share + 27 renov +7 payback = 110.8 to him.

Yours = 179.20 profit share + 100 renov - 7 payback = 272.20 to you.
Then, there is is the mortgage equity to you = 327 - 155 = 172 = total of 444.20

I didn't read the full thread, pleased my answers matched with other posters.

No, it shouldn't. CHT doesn't apply to a principal private residence, which in the absence of information otherwise, I'm assuming this was the family PPR.

*CGT

But the OP says explicitly that they agreed that they would exclude her equity from the calculation. 46% of the house is her equity from when she bought it alone.

710-327 = 383 profit but you still have 155 left to pay and there'd be no profit without your mortgage in the first place.

383-155 = 228k

You spent 100k on top
Your ex spent 34k on top

228-66k = £162k

He gets £48,600 morally but if married and he's legally entitled to half the full value of the house then a lawyer would tell him to go for £166,500 if nothing in writing/ringfenced etc

If acting out of goodwill and he's not lawyering up, then maybe the difference
between £48,600 and £114,900 so offer him £48,600 + £33.150
£81,750

Neither a lawyer nor an accountant.
Am posting this before I see what others have come up with.

Why on earth would you ask anyone on an anon forum @PuddleCake ?

This is your ex husband, right?
You need to ask whoever is handling the divorce and show them the figures.