What are the likely changes to Capital Gains Tax rules for separating couples?
September 2022 | Sehra Tabasum
Currently, if a couple transfers assets between them any time after the tax year in which they separated, there may be Capital Gain Tax to pay.
The new proposed plans , which if approved will come into force on 6 April 2023, will give couples three tax years after the year they cease to live together to make no gain or no loss transfers without triggering a tax bill.
Couples will also be given unlimited time to settle if those assets are part of a formal divorce agreement.
The new rules will also allow those who have moved out of a marital home but kept a share in it to be able to claim Private Residence Relief when the property is sold.
Those who have transferred their interest in the property to their former spouse will be able to apply the same tax treatment to the sale proceeds as applied when they transferred it.
The changes will make the CGT rules fairer and gives spouses and civil partners more time to transfer assets between themselves without incurring tax charges.
These are welcome proposed changes, because currently the law does nothing to assist those separating who are already facing significant financial bills.
There’s already enough financial stress and emotional pressure for spouses who are splitting up, and on top of that they have the extra strain of having to split their finances before the end of the tax year.
These changes will therefore be a huge relief because it will give parties more time to come to an agreement and will reduce the financial cost.
Anyone seeking advice on finances during a divorce can contact Fullers Family Law on 01234 343134 or email us at enquiries@fullersfamilylaw.com
