Probate Law/Capital Gains Tax

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Hi everyone,

This isn't to do with a repossession, I've previously had a repossession which is now settled (thanks to the help I received from this board!). I am in the process of buying the property I live in off my soon-to-be ex-husband. The problem is, he hasn't lived at the property for almost 4 years.

We need to know; are we liable for capital gains tax? If so, who is liable and what figure is it based on? He owes 78,000 on Mortgage, is selling it to me for 93,000 (plus an additional 15,000 payment to him when I sell the house) and the house is currently valued at approximately 165,000.

If anybody can help, or point us in the right direction, I would be very grateful. We have already asked 3 'experts' (including solicitors) all with differing advice! So it's a bit worrying that we may be stung for 40% tax and if we are liable for it, it will affect the settlement figure for the house that we have agreed.

Many thanks,

Mel

-- melt71@tiscali.co.uk (melt71@tiscali.co.uk), September 29, 2004

Answers

its not a problem if he does not own another property. If he does then of course there can be a liability. however the liability is only on the profit. although the revenue could argue that this is a 'sale undercost' and make the appropriate adjustment. Is the house in joint names? if so he can only be profiting on his own half , also he can claim unused capital gains allowances over the last few years. See a good accountant.

-- roger watts (r.watts40@ntlworld.com), October 06, 2004.

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