'Divorce's property with ex-husband may face CGT bill

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'Divorce's property with ex-husband may face CGT bill

I have a tenant on common mortgage with my ex-husband on our former marital home that he has been living in. He will either pay me back or continue to pay the mortgage on the property, he said.

I have agreed the price and now have started the process of contacting the mortgage lender and so on but I was wondering whether this'sale' would have any tax implications for me?

A You may face a capital gain tax bill, but then again, you may not. A definitive answer is determined by when the transfer happens, when you stopped living together and whether you are formally divorced.

There shouldn't be a CGT bill if you are selling a matrimonial home which benefits from private residence relief. If you sell a property on the other hand, such as a buy-to-let house which doesn't qualify for private residence relief, different rules apply.

If you sell your share of the house to your ex-husband in a tax year, there is no CGT bill if you're still living together for at least part of it.

For married couples and individuals in civil partnerships, you benefit from the no gain/no loss rules, which makes transfers of assets between spouses and civil partners CGT free.

Since April 6, 2023, if you are separated, you can transfer assets between you free of CGT until the end of the third tax year after the financial year in which you separated.

His guide to CGT on divorce and separation, published by the barrister Patrick Cannon, states that transfer transactions between you after the third tax year remain CGT-free if the assets are the subject of a formal separation agreement or divorce order. If they are, there's no time limit. However, if they are not, there will be a CGT liability.

The government said in the section of its helpful guide Get a Divorce: Step by Step that the rules for working out your gain are complex and that you should 'contact HM Revenue and Customs or get professional tax help'.