Capital Gains Tax

[WildWellies]

Stbx moved out 4 years ago (into rented house).
At long last we might nearly be in agreement about the finances.
We intend to split the house 60:40 (in my favour) - house value £300K; mortgage £30K.

Will he have to pay CGT on his share?
If so, roughly how is it calculated?

Sale price less selling costs of his share less purchase costs of his share gives capital gain, time apportioned with main residence relief for the time he lived in it. Ignore mortgage, it's irrelevant. CGT is at 18/28% depending on his income level, i.e. basic or higher rate taxpayer (or maybe a bit of both).

This is the guidance given by HMRC

Where, as part of a financial settlement on separation, divorce or dissolution, the spouse or civil partner who has ceased to occupy the matrimonial or civil partnership home:

1. transfers an interest in that home to the other spouse or civil partner the date of transfer takes place more than 18 months after the time when the spouse or civil partner last occupied the matrimonial or civil partnership home full Private Residence Relief will not be due.

1. However, the former matrimonial or civil partnership home can be treated as the only or main residence of the transferring spouse or civil partner from the date his or her occupation ceased until the earlier of the:

a.date of transfer
b.date on which the spouse or civil partner to whom the property is transferred ceases to use it as his or her only or main residence

However, relief for the same period can’t be given for another property (except for the final 18 months of ownership of the matrimonial or civil partnership home) so this concession may not be the best choice in every case.

The spouse who has left may have to pay some CGT if the property has increased in value since separation. The last 9 months of ownership is always treated as if PPR is available.