Will we have to pay CGT?

[AbigHoleinmybucket]

Complicated one here.

My husband and I separated about 8 years ago. The children and I went on to rent somewhere near my mum who then gave me a deposit to buy somewhere four years ago. H stayed in the (what was) family home and still does.
Never officially divorced but we both lived seperatly for all these years paying our own bills etc.

Now I've decided to sell up as my mortgage has gone up a lot and a lot of maintenance costs here that I can't realy afford on my (not very great) salary. I want to go as I don't like the area either for different reasons so it's not just a case of getting a loan to do repairs etc.

H and I have recently been in better contact and have thought about getting a place big enough for all of us (we have 3 kids) if we can manage it.
He is putting his home on the market next week.

I'm trying to sort out finances and wondered whether we would have to pay CGT now if we sell both the houses ( that we've lived in seperately continuously since break up but never oficially divorced) and bought one together.
None of the proceeds for my place came from him (I have my own mortgage and mum's deposit on mine and he is the only one on the titles deeds on his as I am on mine.

Definitely complicated. You might want to pay for advice.

This might help though:

Thank you.
Bloody Hell, that is complicated!

Have you looked at the Gov.uk website?

Usually when an individual disposed of their main/only residence, it is covered by private residence relief (PRR), so not CGT to pay.

The legislation says that spouses can have only one main residence between them. The legislation also defines married couples as being regarded as living together for tax purposes unless they are separated (legally or in circumstances which are likely to be permanent).

I would say that as you have reconciled only one the properties will be covered by PRR and there will be CGT to pay on the other. Although someone may be willing to argue otherwise!

I am a tax adviser but it is worth paying for proper advice here as a lot will depend on the specifics.

FYI - the property that CGT is payable on has to be reported to HMRC and the tax paid within 60 days of completion - https://www.tax.service.gov.uk/capital-gains-tax-uk-property/start/report-pay-capital-gains-tax-uk-property

Many thanks Christmas Cracker.
I might ask my solicitor who is doing my conveyancing.

Couldn't you just formally get divorced? If you are in agreement on finances it could be quite quick.

Then buy a place 50:50.

Would you have enough to buy somewhere if you sold the more expensive of the two houses and rented out the other one?

who will more likely tell you to get separate tax advice on that point if just a standard conveyancer

Probably just but wouldn't really want to rent this out tbh.

OK thanks.

You want to move back in with your co-parent and own a single property together, is that the gist of this?

I can't see that any CG liability applies to the sale of separately owned properties you each live in.

There is a weird thing about not transferring assets between spouses who have 'separated', but I think that amounts to similar situation to when CGT is applied to other large cash gifts between people; live long enough & there's no CG liability, but there is on the interest gained; I have no idea how that works with a shared house purchase. Suspect even Inland Revenue find it too much headache to work out.

Thanks Peanut.
Yes, that's the gist of it really due to finances and other things.

We are legally still married though as never divorced and I was a SAHm at the time. The finances were never split so I pretty much left with nothing from the home he still lives in. My house has made about 46K since I bought it if this sale goes through.

have you actually suggested this house-share idea to the co-parent?

What if you fall out & he insisted he wanted to sell up but you wanted to stay?

Yes, we have discussed it.
In that case, we'd probably have to divorce and split the assets.
I think we'd need to draw up a post nuptual agreement regarding this or something similar.