Capital gains tax when selling property due to divorce

[Notsocleaver]

I have a property I have been renting out for a number of years but been order to sell by the court and give some cash to ex wife doe anyone know if capital gains tax will charged on whole gain or only the part of gain I keep. The house is in my sole name.

 

[AAAContributor]

I think you may have posted earlier today in another forum.

@Gordon Gekko had replied to say that the CGT arises on the whole gain, with no deduction for the lump sum that you've been ordered to pay by the court.

Where there is a court order to transfer the property to the former spouse, the transfer can take place at no gain/no loss (i.e. no CGT for the person disposing of the asset under the court order) but it looks like this does not apply here as you are selling an asset and paying a lump sum.

 

[Gordon Gekko]

I think you may have posted earlier today in another forum.

@Gordon Gekko had replied to say that the CGT arises on the whole gain, with no deduction for the lump sum that you've been ordered to pay by the court.

Where there is a court order to transfer the property to the former spouse, the transfer can take place at no gain/no loss (i.e. no CGT for the person disposing of the asset under the court order) but it looks like this does not apply here as you are selling an asset and paying a lump sum.

Yep, agreed. I don’t understand the “sell and then give” element.

 

[Notsocleaver]

I think you may have posted earlier today in another forum.

@Gordon Gekko had replied to say that the CGT arises on the whole gain, with no deduction for the lump sum that you've been ordered to pay by the court.

Where there is a court order to transfer the property to the former spouse, the transfer can take place at no gain/no loss (i.e. no CGT for the person disposing of the asset under the court order) but it looks like this does not apply here as you are selling an asset and paying a lump sum.

Thank you that’s what I thought. My understanding was that if I transferred the property there would be no gain but because I have been told to sell the property and give my ex some of the profit I will have to pay CGT on whole profit. I think I may have been better to transfer some of the property first and then sell it, and I would have less of a gain, bit late now

 

[torblednam]

In the couple of instances I've seen of settlements / property adjustment orders, the court's order has explicitly stated that it's an amount after relevant taxes are paid, that is due to the other spouse. You need to make sure that you know exactly what the order says.

 

[Brendan Burgess]

That order makes no sense.

"Sell the property and give your wife €50k" is stupid.

But "Give your wife €50k and if you have to sell the property to get it" would make more sense.

For example, if a lender gave you a top-up.

Brendan