Consent order approved - capital gains tax ?

[Getitrightforonce]

No one has mentioned capital gains tax to me and I’m worried I’ve got a huge bill ahead now. I left fmh 2.5 years ago and I’m getting a 6 figure payment to sign it over. I’ve got my own huge mortgage and I need the payment. Will I be liable for this tax now? Can anyone help please - my solicitor is woolly !

Probably need to see an financial advisor x

There shouldn't be any Capital Gains Tax on divorce as long as its part of the settlement. There is also no CGT on sale of family home so not sure what you are referring to.

Thanks for the replies. It is part of the settlement- the property is not being sold just transferring my share for the payment. Sorry if I wasn’t clear.

Have you already bought your new house?

You need advice from a tax accountant.

This is a good explainer

www.penningtonslaw.com/news-publications/latest-news/2021/it-s-all-in-the-timing-the-family-home-and-capital-gains-tax-on-divorce

Hi, thank you - yes I bought my own house two years ago. I was lucky that I could but the mortgage is huge plus the additional stamp duty and only intended to be short term until the consent order was done and I got my payment. After everything it now looks like ctg also hit me. The kicks keep on coming.

Your solicitor should have flagged that and sent you for advice.

You have some options, but you need to talk to an accountant, family solicitors generally don't advise on tax, beyond spotting the issue and sending you for tax advice.

Thank you. I will look for an accountant to help me. My solicitor did not mention it once. Just when I thought it was all coming to an end this pops up - feels bloody endless. Thank you for your input. I feel an idiot for not knowing this despite paying for legal advice throughout. Suddenly my settlement is potentially significantly smaller. What a system.

You may well have recourse against the solicitor. It should have been factored into the settlement.

Thank you - how would I go about exploring that recourse please?

So I'm no expert but CGT is not payable on your main residence. So EVEN IF your were liable for some CGT it would only be for the period since you purchased your new/second home. What I mean is you would only be liable for whatever capital gain had accrued on that house in the last two years - NOT over the entire period of your ownership. Also, when exactly did you buy the new one? I do know that you have two years from the date of purchase of second/subsequent property to 'elect' for tax purposes ANY of your properties as your main home ie you can nominate a property you don't actually live in. So if your purchase was anything less than two years - even a day - you need to get on to HMRC immediately and make the election. Does that make sense??

@bananamango thank you that makes me more hopeful! I am weeks under the two years. I am off to an accountant to see if I can minimise the impact. Thank you for some hope!

Don't stress about 2 years, it's calculated by the month. So if you owned the property for 60 months andcyou'd been out for 15, you would pat CGT on 15 60ths of the gain (less annual allowance).

I would find out what you are likely to pay, then consider writing to the solicitor to say you think they should compensate you as you think it was negligent not to factor in CHT in determining your share.

@MrsBertBibby thank you so much for your replies. It is so stressful but I will deal with it. Appreciate the responses all so helpful, much more so than my expensive solicitor!
I will get the numbers from an accountant and then decide what to do about the solicitor I’m not sure how much fight I have left in me for him!