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Capital Gains tax on my flat after separating

  • JojoPurbb89
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02 Nov 16 #485348 by JojoPurbb89
Topic started by JojoPurbb89
Hi, will try and keep this to the point and avoid emotions! I'm in the UK if that makes a difference..
I've lived with my partner for 3 years and we married just 5 months ago, he now wants a separation to lead to divorce.
He earns a lot more than me and has much more assets. When I moved in with him I was in the position to buy my own flat, so instead of missing out of this opportunity I bought a buy to let(my first and only property) and have been renting it out, and paying my partner a small amount of rent.
I am aware after such a short marriage I won't be eligible to any assets of his. And I still have my own flat to move to now once I change it to a residential mortgage.
However I have realised now (too late) that I may have to pay capital gains on my flat if i want to sell it in future as i rented it out for 3 years. I was told by a broker when I bought it that I wouldn't have to pay CG because it was my only property, but this now appears untrue. The flat has almost doubled in price in this time.
I guess I feel that my husband is leaving this relationship having benefitted financially, I've also helped work on his flat and supported his business, but I will be leaving it possibly substantially worse off.
I don't want a huge legal battle over this at all, but was wondering where I stood.

  • ClareA
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11 Nov 16 #485616 by ClareA
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Can't help but I came on here as have exact same question. I've got a house I lived in on and off but haven't lived in it for sometime since being married. Now it needs to be sold so I have somewhere to live post separation and am v worried that I'll have a big CGT tax bill so my budget will be diminishing. Will be following with interest...

  • Bubblegum11
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11 Nov 16 #485619 by Bubblegum11
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Hi,
I'm no expert on the matter, but I do have a BTL and had an accountant compute the CGT liability for me. It can be quite complicated especially if you have lived in the property part of the time. You may be entitled to private residence relief, Lettings relief and then there is always your personal CGT allowance of £11,100 which is tax free. You can also deduct capital expenditure from your gain. After all the allowances taken off mine wasn't as much as I expected. I would get an accountant to work it out for you and advise you as timing of when you sell or moving back into the house before selling could make a big difference to how much you pay.

There is some more information here;
www.gov.uk/tax-relief-selling-home

  • polar
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12 Nov 16 #485624 by polar
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Following on from the last post.
I do believe there are portions of capital gains. Its not an exact science to the average person but you do get an allowance for actually living in it providing that it is your primary residence.

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19 Nov 16 #485805 by summerishot
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Hi

As far as I understand if you "own" more than one property and dispose any of your property then CGT will apply on the profits you make subject to threshold. This appears to be your case.

However, if you own only one property and lived elsewere and it is not your primary residence (ie., for over 18 months) then you are also subject to CGT.

Happy to be corrected if I am wrong.

Thanks

Correction: Re-reading your post are you actually own a share in the house you are living with your husband? what difference does it make if you bought a buy-to-let flat wether you are married or not? - if you are going to sell CGT will apply regardless.

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