Divorce and buying out husband

[poppyfield71]

I have applied and paid for a joint divorce application a few days ago. Eventually either we will sell the house and split it into our agreed respective shares or I might possibly buy out my husband if my inheritance from my mum’s estate (she sadly died at the end of October) is sufficient. A friend told me when his wife bought him out he was timed out and was a bit late to avoid paying capital gains tax which were obviously keen to avoid. Has anyone gone through this and could advise m how you go about buying out, taking a name off the deeds and mortgage and the timings please? Currently the divorce and financial arrangements are amicable and not disputed. Thank you!

As ever, it helps to speak to a lawyer as one of your first steps. It is a relatively straightforward process, which can be done in a few weeks (subject to availability of your lawyer and mortgage company). It is called a “Transfer of equity”. Call your mortgage company, and explain your scenario - people get divorced all the time, mortgage companies are across this 😊 You’ll need to get a property lawyer to draw up a deed of transfer, to transfer the equity from your ex to you. Then you provide that to the mortgage company, and once you’ve both signed all paperwork then you should be done. I advise instructing a respectable local high street property lawyer. Not sure about capital gains tax, sorry. I hope it all goes smoothly for you, and congratulations on your new chapter x

This is excellent advice ^. Good luck x

I’ve never heard of being “timed out” when it comes to capital gains tax when buying out the family home during post divorce? There was 4 years between my divorce and paying ex off and it was fine. A quick google would suggest that normally it’s 3 years if you have just been co habiting and not married but if it’s part of a formal divorce agreement then there is no time limit at all.

I think, but I'm not a solicitor, that you have to do this before your final consent order comes through on your divorce.

If you try and do it after you're divorced you will have to pay capital gains tax.

@sallymonella

no you don’t need to do that - if selling the home is part of a formal divorce agreement no capital gains is due at any time whether it’s a year post final consent or 10 years

Capital gains could be due if your ex buys another property before the family home sold or you buy him out

you should agree overall financial split before selling/buying to know what each party receives and also wherever your inheritance is impacted in the split

Thanks everyone. Still not sure if I can afford to buy him out or whether we’ll need to sell. Originally the house was bought with 93% of the proceeds from my previous home as a singleton so am hoping our amicable decision for him to keep his entire pension that he had in his sole name and me keeping my share of the house will be acceptable as our proposal to get the consent order through. I don’t know how often courts get involved if a couple having clearly agreed on the financial division of assets in a consent order and there’s a logic to it.

Courts generally don’t get involved unless it appears to highly favour one party

if it’s pretty equal ( within a range ) they won’t
or if there’s very clear explanation for it .

they may ask clarification questions and want to know one party is not being coerced

I just did it through a lawyer, well, lawyers. You need a different one for your house to your divorce one. I also had to have another one for finances not house or actual divorce-related. I had no idea how it all worked, just told them to get me out of this (long) marriage, get me the house, and do it as painlessly as possible. I was in a position to keep the house I’m glad to say. Good luck with it all op, it will be worth it.

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg65356
on the CGT aspect, it’s all here.