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Divorce / Mesher Order / Deferred Charge / CGT

CGT liability if property is sold on the open market?

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If a husband is subject to a Mesher Order, i.e. the last 15 years he has lived with his parents while his wife and childrenĀ have continued to live in the family home, what are the CGT implications when his interest in the property is disposed of when the children reach adulthood/21 years old:

1) Transfer to his wife: I am assuming no CGT.

2) Actual sale via an estate agent to a member of the public: I am assuming CGT.

In the example above, the husband does not have any PPR as he lives in his parents' house.

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Replying to lesley.barnes:
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By GR
15th Jun 2021 16:53

lesley.barnes wrote:

www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg65365 does this help?

Thanks. It looks like there is generally no CGT to pay in both situations, e.g. transfer to spouse versus selling to the public.

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Replying to GR:
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By Tax Dragon
15th Jun 2021 17:41

I am a bit confused by the references to wife and spouse (and why your client would gift his property away to his ex, if that's what you mean). But I'm not sure how relevant that is. What's more important is that the HMRC analysis rests (as I understand it) on the trust being compulsory - a Mesher Order. This takes away any element of bounty and hence any settlement rules.

If the arrangement was not imposed by court order, the analysis may differ.

(Did it really last till 21? Seems unusual, these days.)

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Replying to Tax Dragon:
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By The Dullard
15th Jun 2021 20:14

Well, it could have been granted up to 21 years ago! Although 15 seems more likely.

One of the children might have a physical or mental impairment that may have caused it to be longer.

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Replying to The Dullard:
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By Tax Dragon
15th Jun 2021 21:57

Makes sense.

Still living. Still learning.

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