Consent order not sealed before specified deadline for Equity Transfer - catch 22

[nyorksdad]

Hope someone could advise on this

I'm transferring Equity share in house to ex wife

The financial consent order that we have drew up at xmas says this Equity transfer must be completed by the 31st March 4pm

However , because my ex delayed and stalled for several weeks in signing final forms, the consent order was only sent for sealing a couple of weeks ago and not had a decision yet

I can't complete the equity transfer until the consent order is sealed otherwise I'll be liable for several thousand pounds capital gains tax on the equity transfer

So essentially question is say the order is sealed on the 10th April and the equity transfer completion date is immediately after, am I technically going to be in contempt of court becuase the consent order says it should be completed by the 31st March

I'm pretty sure my ex would love nothing more than that to happen!

Many thanks for any help

[Mumof3confused]

I doubt it. Does it have tax implications for either of you if completed in the new tax year?

[UmberSnake]

@nyorksdad when the consent order goes before the judge surely he/she will raise questions on the date of 31 March as it will probably have passed or be be too close as It takes a few weeks for the transfer to be done. My consent order said the transfer had to happen by 4 pm 56 days after the date of the consent order or the final order, whichever was the later. The transfer process started immediately after the consent order approval, was very simple as no mortgage involved, and I was told it will take about 4 weeks for it to go through.

[nyorksdad]

@Mumof3confused Because I moved out over 6 years ago, unless the equity transfer is done as part of a sealed financial consent order, I would be fully liable for capital gains tax so I have to wait

@UmberSnake Thank you for info, I hope that will be the case, I'm nervous of anything that has to go back to my ex and her solicitor to be clarified or reviewed as she takes weeks or even months to answer even simple questions. Just want this to be over

[UmberSnake]

@nyorksdad totally understand that as I had a similar problem. Was so worried there would be questions on the consent order for that reason. I’ll keep my fingers crossed for you

[Jonathan70]

I doubt that HMRC are going to come back to you as the agreement is still a part of a financial order, the terms of the agreement are the same and the delay is not due to you stalling.
My consent order stated that the equity would be split in a certain way if completed by a date and another way if it wasn’t and the first date had already passed (due to the year taken to get a final version agreed, submitted and sealed) and this wasn’t queried at all - it was sealed within 4 wks.
I still had to pay CGT despite it being part of a financial agreement as it was seven years later, not within the three years given to transfer?
I don’t know if you have tried calculating what your CGT would actually be taking into account PRR etc but you might find it’s nowhere near as bad as you thought. If you are concerned you could now ask that any tax levied is now split due to the delays - mine was split 50/50. The tax itself was far lower than I initially thought.
Best wishes with it all.

[Jonathan70]

In my case the house was sold, not transferred, which is why yours is different.

[nyorksdad]

Thanks Jonathan for the info

When I worked it out, including relief, it would have come to about 6 grand so very keen to avoid that!

I'm very lucky that the law changed in 2023 to allow for complete relief if part of the consent order

[Jonathan70]

Yea, you want to avoid that! Mine was after that date too but we sold the house rather than transferred the asset so it was still payable. Luckily, I got relief for about half the time we had owned it on my share, so it wasn’t as bad as I first thought!

I think that you’ll be ok re the transfer because the relief would apply regardless of when the transfer takes place. The date on the order is not connected to a date when the relief runs out - I’m assuming that date is there to move things along?

Slightly different but my ex tried to sell the family home without my knowledge. When she found out that I’d be entitled to my share, she decided not to sell the family home after all even though she could easily afford to purchase another property and release my equity. The date on my consent order said that she got a higher % if the house was sold sooner rather than later. However this date passed by the time the order was submitted, therefore it read really strangely. Eg in 2024 it said - if the house is sold before August 2023 ….it wasn’t queried.
if the Court do query it, can’t you move that date back 3 months on the order and re submit?
Can you make the transfer before the order is sealed? Or is it very unequal and likely to attract questions?