So, my now wife has a house down south, ive got one up north – she lived in it for few years when we met and later (sole mortgage), she moved up here and we re-motgaged my house to buy out my bro(so mortgage in both our names)

her house down south we have been doing up to sell now,

will she be liable for cap gains tax?

whats the crack?

yes, payable unless its your only residence, limit of around 11k per person, you could split any profit into different family member accounts to ease the pain a little!

True but I think you can negate the cap gains tax such as there is any in this climate, by leaving the property empty for a period of time before selling it. I think anyways.

Aiui it will only be liable for cgt since she moved out not the whole time she owned it. As the market has been pretty flat recently that might not be much.

I believe there’s also an exemption period (3 years rings a bell) after it ceases to be your main residence in which you can sell it without paying CGT. Also possibility of loss if it was bought at wrong time – it’s only gains that are taxed remember.

Some of the above is true.
CGT is only an issue if the house if sold for more than she paid for it, hence capital gain

If it was her primary residence then you can get help via personal tax allowances to mitigate the CGT liability. The annual limit is roughly £11k for everyone but as it was previously her primary residence then there is an additional £40k one-off allowance that she is entitled to. It also depends on time scales as the Inland Revenue will give you up to 3 years of unnoccupied or even as rented. They will pro-rate your bill depending on the time she occupied the property.
At the end of the day she is liable for sale price – purchase price
but she can also offset work done on the house in terms of serious improvements e.g. fitting a central heating system, an extension

The HMRC website has lots of inpenetrable documentation but your best bet is to go to a tax specialist and pay them £500 or so to submit this for you.

I think in STW Top Trumps that counts as a trump. 🙂

ElShalimo has nearly got it right. If you drop me an email with the following I’ll do you a quick capital gains calc:

Years owned.
Years unoccupied.
Years rented if at all
Purchase price inc solicitor fees and stamp duty
Estimated selling price
Estimated estate agent and solicitor fees

I’ve just done some calcs – HMRC site is very good.

She would entitled to ppr for the period that it was occupied as her ppr (worked out as a fraction – see HMRC site)i.e first x no of years. You are also entitled to the last 36 months whatever so x plus 3 years so x plus 3 years out of the total period of ownership. {Work out the chargable gain. Was the property let out after it ceased to be her ppr, if so so letting relief will be available. You are entitled to of set cost of iprovements, cost of aquisition and disposal. She will have an annual allowance of £10,600.00. Subject to availability of letting relief it may be possible to transfer beneficial ownership into your joint names – transfers between spouses are exempt so doubling the tax free allowances i.e yous and hers.

Now if someone can tell me the basis of what an open market value would be on a tenancy under the Agricultural Holdings Act for CGT purposes on a surrender the tenancy i can go to bed happy.

Nipper – about £12 should do it
😉