Divorce And Finances

[michaelbush]

Hi, I have recently got divorced and need to clarify my position financially.My ex wife and children (17&19yrs) still live in the family home to which I pay £600/month. I also give my son £80/month and daughter £100/month. We have agreed that they can all remain in the home until my youngest reaches 21 yrs of age. I am in the process of setting up home with a new partner but am worried that this might affect my share of the family home once it is sold. Could you inform me of my position what I should do to protect my investment in the family home and protect my investment in my new home.

Regards

Micahel Bush

[magsmay]

I'm sure someone with more knowledge than me in law will give you an answer -but for what its worth -if your name is on the deeds of the house then you legally share ownership and your circumstances when the property is sold is irrelevant . How it may affect you is Tax Liability -as its not your permanent home -but a capital asset -then any profit from the sale will be liable to Capital Gains Tax. The profit will be calculated on the difference between the price you paid for the home and the price you achieve (minus what's left on the mortgage) divided in half between you and your ex wife) You have a Capital Gains Tax allowance which I believe is around £20k but not sure on that one.

[bednobs]

this should have been sorted out before your divorce was finalised (although that's not much help to you now, i know)

[FredPuli43]

In what way is your investment in the family home at risk? Did the court order, apparently by consent, not provide for ownership/ share in equity of the home as well as providing for the right to remain?

Your position, your "investment" is and remains what it was at the time of the divorce, whether or not that was spelled out. Lapse of time, or your obviously predictable setting up home won't affect it. Only a substantial change in your ex's or children's needs could affect you.

The tax position ?. Bit hard to argue that your former matrimonial home is your principal residence when you're divorced and get a new one but I suspect the Revenue have some special rule about this situation, which must be common.

[Barmaid]

I agree with Fred.

I think in terms of the CGT position there is no need to worry because this is effectively a trust which provides accommodation for a dependent relative so should be exempt.