Good news story!

It is not the most exciting, but for divorcing and separating couples reforms were announced last month (15.3.23) improving the situation considerably in respect of Capital Gains Tax liability on the transfer of assets between separating spouses and civil partners.

The previous position was that spouses and civil partners could only transfer assets  (usually property) between themselves at no gain/no loss for CGT purposes up to and including the year of permanent separation.   After that, any transfer of assets were subject to CGT calculated on their market value.

From 6^th April 2023 those transfers of assets can now happen within 3 years after separation and an unlimited time if the assets are subject to a formal divorce agreement.

There are also some special rules that apply to individuals who have maintained a financial interest in their former family home following separation which apply when that property is eventually sold.

This is not a tax lecture but simply to flag up that within financial settlements following a divorce there are usually important tax considerations that must not be overlooked if a fair outcome for both spouses is to be achieved.

The best way to ensure that you tick all the boxes in your settlement terms, is to obtain the advice of a specialist family lawyer who in turn may point you in the direction of expert accountancy advice.    Instructing experts does of course involve a certain level of cost, but you could stand to lose a lot more if you try going it alone.

Tuesday, April 18th, 2023 Divorce, News