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Q&A » Buying and selling property
I have recently divorced from my wife.
We had 2 properties, one where we lived and another investment property (both with mortgages).
As both properties are too big for either one of us to afford individually after the divorce, we have decided to sell both properties and downsize to 2 smaller houses.
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879The short answer is - No!
However, the actual calculation is quite complicated and you might not pay too much.
Were both properties in both names?
Did you live in the investment property at all? If so, give periods.
What is the realistic profit you are likely to make? Allow for the cost of purchase and cost of selling. Agents and legal.
Mike
Posted on 07 September 2012 |
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21There is no CGT on your main home.
You are entitled to £10k CGT allowance on the investment property or £20k if in joint names.
If you have lived in the investment property previously, even for 1 day, you are entitled to CGT exemption for the last 3 years of sale. ie if you have owned the property for 10 years, you only need to pay CGT on 7/10 of your gains.
Why not sell your main home and move into the investment property before you sell it ? Not sure if you have to pay CGT at all if you sell it while in occupation as your main home. The above rule probably applies.
Posted on 08 September 2012 | Love 0 loves
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1I've found these comments interesting as I understood that you had to live in a property at the start of owning it to claim it was your residence and thus reduce CGT.
I own a property, on top of my main home. It was bought in my husband's name, then put into joint names as an asset of our company. Following division of assets on divorce it is now in my sole name and rented out as business premises, though could easily revert back to residential with the appropriate permission.
Could I sell my main home and move to the other property to reduce CGT?
Posted on 08 September 2012 | Love 0 loves
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879The rule is that if you live in a property as your Principal Private Residence then you can claim CGT relief for that period of residence. You can also claim relief for the last 3 years if you have ever lived there. However, if your residential period includes some of the last 3 years, that overlap period will not count twice.
It is only worth moving into the property before sale if you have never lived there.
Mike
Posted on 08 September 2012 | Love 0 loves
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