Will I have to pay tax on house sale profit share from exh ?

[Boopbeedoo]

Divorce terms agreed that I would sell the house this year. Currently on the market. Instead of taking pension from my ex h, we agreed I would have a lump sum of his house sale profit share.

Will I have to pay tax on this ?

I'm presuming I won't physically see the amount in my bank account from ex h as it will be wrapped up with the sale of the house and my house sale profit share, together with the lump sum from him, will then go towards purchase of my new property.

Have you had proper legal or financial advice on this, OP?

No unfortunately. It's now that I'm considering an offer, that I'm starting to worry 😟

If you’re referring to Capital Gains Tax (the tax you pay on profits from property sale) - then no you won’t have to pay CGT.

CGT private residence relief means that anyone selling their main home does not need to pay CGT on the proceeds.

You almost definitely don’t need to pay tax on the funds. You’ll be paying Stamp Duty on your new property (and you probably won’t be paying Capital Gains Tax- is your name on his property? - double check the terms for paying that) - they’re the only taxes relating to house sales and purchases which apply.

Do you both still live there? If not who moved out and when? Does that person own another property? Depending on the answer to those questions there might be capital gains tax to pay. A formal agreement should really cover who pays the tax and you should take tax/legal advice before going ahead.

Yes, if capital gains tax applies, it should be taken into account in the splitting of the finances otherwise one person could end up with thousands less than they thought. However, you’d need to give the info @katieak has mentioned to know whether CGT applies. Who owns each house, who lived in them and when did they leave, etc? Chances are it won’t apply, but best to know before a final agreement is made.

We got a mesher order so I would avoid the CGT. If it was agreed that sale would be delayed, then probably you're fine for avoiding the CGT penalty.