Tax implications for property sale - Separated couple

L

Laurel

Guest
I wonder if anyone can shed any light in this situation. My parents recently separated and my mother was awarded the family home (only asset). She plans to sell the house and purchase her smaller home for herself and a second residence.

My question is, is she liable for tax/capital gains (she is 59 years of age)?

Also, she intends to give my father the option of living in the second residence - more a right to residency as he would not be paying rent, only the utility bills etc..
Has anyone any experience of the implications of such a situation? If he was not looking after the house etc.. and she wanted him to leave, what rights would he/she have as they are technically not landland/tenant?

I appreciate this is not a very straightforward situation, so any advise/suggestions are greatly appreciated.

Regards,

Laurel
 
Assuming it's her (previously their joint) principal private residence (PPR) then there should be no CGT liability. One thing to note is that separated couples can retain their first time buyer status in certain circumstances even if they previously owned a home, which can be beneficial from a CGT, stamp duty and mortgage interest tax relief point of view.



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Thanks for that.

Yes ,she will be selling the current PPR and will acquire a new one and an additional residence.
However, as the second home would not be her PPR, does anyone know whether she is liable for tax on that?

Laurel
 
The second property would automatically be classed as asn investment property and would be subject to the usual tax treatment. I don't think that there's any special allowances for the fact that her ex husband will be living there, even rent free. In fact, I'm not sure if provision of rent free accommodation could actually give rise to a gift tax liability on your father's part. Was there a solicitor involved in the separation and, if so, did she run these issues by him/her?
 
thanks again - yes, there is a solicitor involved and I will advise that she raise these questions.

Thanks again.
 
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