Leaving the Marital Home and CGT Implications

[ByeByeMissAmericanPie]

I’m very close to leaving home due to abusive marriage. I’m a SAHM. I’ve found a rental that will suffice, but have discovered that if I leave the marital home, I will be required to pay CGT on any profit that’s made on my half of the sale of the house?

Is that correct?

I’m also picking up that due to a change in rules, HMRC require the house to be sold in 9 months.

I can’t believe we have to live under the same roof in order to negate this!

I need to go, but it’s a big house and we’ve been here a long while. The profits will probably be quite large. Seems crazy to throw away a chunk of money.

I have separate funds to pay the rent and keep me going for a year or 18 months.

Does anyone have any words of advice?

Hi, I don't think that CGT would apply. You're renting so it still remains your only owned property. I guess CGT might come in to play when a couple had a property portfolio of buy-to-lets or holiday homes that were going to be disposed of?
I also haven't heard anything about selling the property within 9 months with regards to HMRC. I think the only timescale a Judge might lean towards is to stop the occupant agreeing to sell then pricing themselves out of the market so the property didn't sell and they remained the sole occupant?

No that’s not correct
If you buy another property than cgt could become due on your share of marital home if it’s not your main residence

I was working on the basis that ByeBye said she had found a rental property but you're right to stress the point.

Yes my point was she’s not buying therefore no cgt due

If your safety is at risk obviously leave but if it isn't please don't leave .
I am getting divorced due to many things including mild domestic abuse ( She hit me a couple of times leaving me with a black eye). She also financially abused me resulting in manageable debts of £20000 .
But I'm struggling to get a good deal on the equity in the house and the abuse is being ignored.
Only leave as a last resort. I'm here if you need any advice from my experience. My divorce will have to go to court now after two years of her with holding paperwork and also ruining my relationship with my daughter.
The support you receive from anyone including banks and police is none existent

If you move out, the house is no longer your main residence, even if you only move into a rented property rather than buying.

This means that potentially on the sale of your house, CGT might be due.

If the house has been your main residence at any time during your ownership you are deemed to have lived there the last 9 months of ownership. That was the change this tax year - it used to be 18 months and if you go back even further it was 36 months.

So if you move out now and sell in 2 years’ time, there will potentially be CGT on the gain.

However it’s not as simple as taxing the whole gain. If you have owned the property for say 10 years and out of the whole period of ownership occupied it (Including the last 9 months) for say 8 years you pro rate the gain over the 10 years - and would only be liable on 1/5th of the gain - being 2 out of 10 years. From that you can deduct your annual exemption which is currently £12,300. Finally you would pay tax at either 18% or 28% on the gain, (or a mixture of the two) depending on whether you pay basic or higher rate income tax.

Thank you ALL so much for your replies. Much appreciated.

I think @Arewethereyet21 has hit the nail on the head. The house I’ve lived in has been my main residence for 15-16 years so renting for 9-12 months needs to be documented as being temporary.

We also have a buy to let but is co-owned so cannot move in there. He can legitimately harass me if I’m living there and I cannot change the locks. I would plan to take the b2let as part of the asset division.

If I can...?

That’s good to know that if I do need to pay CGT on the main residence/ marital home that it’ll be proportional. I would think main house is in excess of £2M so it could be quite a chunk.

As moving out was necessary rather than a choice and is all related to the break-down in the relationship I would have thought a Judge could very easily order that an adjustment is made in the settlement to compensate you for an CGT liability.

Get legal advice. I was liable for CGT as I owned a property but we had lived in a rented property for a number of years. The CGT bill came off the assets that were split so we both took the hit

I called the HMRC advice line and they confirmed I would be liable to CGT on my portion of the matrimonial home if I moved out and rented somewhere. Since April private residential relief has gone from 18 to 9 months.