Capital Gains - Ex sells house, do I get stung???
Discussion
My ex would appear to finally be moving out of our old house and moving on with her life. 
The house will be sold and the resulting equity split between us. But, is Gordan b
d Brown likely to be stealing any of this money out of my back pocket???
Situation is this - House bought probably 10 years ago, I moved out 4 years ago, house now on market for just under 3 x initial cost, once fees and mortgage paid off I will receive 45% of the remaining pot, plus the endowment policy (total likely to be around the £20k mark).
Someone has scared me by talking about the possibility of capital gains tax swiping 40% of the money I then receive post sale
Anyone know what the deal is with this?
Cheers
Dom
The house will be sold and the resulting equity split between us. But, is Gordan b
d Brown likely to be stealing any of this money out of my back pocket??? Situation is this - House bought probably 10 years ago, I moved out 4 years ago, house now on market for just under 3 x initial cost, once fees and mortgage paid off I will receive 45% of the remaining pot, plus the endowment policy (total likely to be around the £20k mark).
Someone has scared me by talking about the possibility of capital gains tax swiping 40% of the money I then receive post sale
Anyone know what the deal is with this?
Cheers
Dom
I'd seek the advice of an experienced and expensive accountant or tax lawyer in all seriousness.
If you have a CG of 100K due and you are facing a 40K bill, 1K is worth it to save 39K.
Even with half or a quarter the CG it is still worth it.
You've got to fight to keep what's yours these days but I'd rather my money go to keep a firm of accountants in business than fund some government pointlessness.
If you have a CG of 100K due and you are facing a 40K bill, 1K is worth it to save 39K.
Even with half or a quarter the CG it is still worth it.
You've got to fight to keep what's yours these days but I'd rather my money go to keep a firm of accountants in business than fund some government pointlessness.
GavinPearson said:
I'd seek the advice of an experienced and expensive accountant or tax lawyer in all seriousness.
If you have a CG of 100K due and you are facing a 40K bill, 1K is worth it to save 39K.
Even with half or a quarter the CG it is still worth it.
You've got to fight to keep what's yours these days but I'd rather my money go to keep a firm of accountants in business than fund some government pointlessness.
If its not your main home and you own other property you may be asked to pay some tax!
Seek professional advise!
I presume that you bought the house jointly with your(now) ex-wife.
You could be liable to CGT. However, even if it is no longer your main residence, it once was and therefore the length of time you spent in the house will go a long way to reducing the gain. Also, don't forget that the first £8,500 of chargeable Capital Gains in the tax year 2005/06 is exempt.
So, to work out whether you might have a chargeable gain, you need to subtract the cost of the house from the proceeds of the sale. Apply Taper Relief to the gain. Split the gain in two. If your share of the resulting gain is under £8,500, you have nothing to worry about. If your share of the gain exceeds £8,500, you will need to apportion the gain by the length of time the house was occupied by you against the length of time the house was owned by you. The last three years of ownership are always treated as if you were resident there too.
You could be liable to CGT. However, even if it is no longer your main residence, it once was and therefore the length of time you spent in the house will go a long way to reducing the gain. Also, don't forget that the first £8,500 of chargeable Capital Gains in the tax year 2005/06 is exempt.
So, to work out whether you might have a chargeable gain, you need to subtract the cost of the house from the proceeds of the sale. Apply Taper Relief to the gain. Split the gain in two. If your share of the resulting gain is under £8,500, you have nothing to worry about. If your share of the gain exceeds £8,500, you will need to apportion the gain by the length of time the house was occupied by you against the length of time the house was owned by you. The last three years of ownership are always treated as if you were resident there too.
Eric Mc said:
I presume that you bought the house jointly with your(now) ex-wife.
You could be liable to CGT. However, even if it is no longer your main residence, it once was and therefore the length of time you spent in the house will go a long way to reducing the gain. Also, don't forget that the first £8,500 of chargeable Capital Gains in the tax year 2005/06 is exempt.
So, to work out whether you might have a chargeable gain, you need to subtract the cost of the house from the proceeds of the sale. Apply Taper Relief to the gain. Split the gain in two. If your share of the resulting gain is under £8,500, you have nothing to worry about. If your share of the gain exceeds £8,500, you will need to apportion the gain by the length of time the house was occupied by you against the length of time the house was owned by you. The last three years of ownership are always treated as if you were resident there too.
Cheers for the responses, I wont pretend to fully understand what you have put above but basically heres the details:
I have not lived there for the last 4 years'ish.
I bought the house originally 10/11 years ago for £32,500 (minus 5% deposit, so mortgage is for £30,875).
House is now valued at approx £90,000.
Possible equity is therefore £59,125 (my share @ 45% would therefore be £23,650).
The endowment is being assigned direct to my stepdad due to o/s loan arrangement we had with him.
So Im assuming that I am going to be proportionally f
d up the ae by the government for some of this cash... Has anyone got any good ideas how to avoid letting the robbing f
s of the govt laying their greedy mitts on this money (if I have to pay them any that is 
)To enable an accountant to work out your CGT position, the following details would be needed:
The EXACT date the house was purchased ( day/month/year).
The cost of the property at the date of purchase - inclusive of all legal fees, stamp duties and estate agent fees etc.
Whether the property was purchased jointly with your former wife. If not jointly, in what proportion was it owned.
Were there any further capital costs spent on the property during the period of ownership - "enhancement costs" in Capital Gains Tax language. If so, when were they incurred and how much did they come to?
the EXACT date (day/month/year) you moved out of the family home.
Whether you purchased a new property for yourself.
Amounts owing on loans (to banks/building societies and/or father in law are irrelevant for CGT purposes).
The EXACT date the house was purchased ( day/month/year).
The cost of the property at the date of purchase - inclusive of all legal fees, stamp duties and estate agent fees etc.
Whether the property was purchased jointly with your former wife. If not jointly, in what proportion was it owned.
Were there any further capital costs spent on the property during the period of ownership - "enhancement costs" in Capital Gains Tax language. If so, when were they incurred and how much did they come to?
the EXACT date (day/month/year) you moved out of the family home.
Whether you purchased a new property for yourself.
Amounts owing on loans (to banks/building societies and/or father in law are irrelevant for CGT purposes).
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