Tax changes give breathing space to divorcing couples
- AuthorLiz Graham
Alongside all the challenges, there is at least some good news, with a valuable change in the way divorcing couples are taxed. Since April 2023 there has been a new timetable on capital gains tax reliefs when couples break up.
While together, transfers and disposals between a couple can be on a ‘no gain, no loss’ basis, and previously the relief was also allowed during the first tax year of any separation. Once outside that first tax year, matters became complex and could involve tax charges on the spouse or civil partner who was transferring the asset.
Now, the new rules give separating couples up to three years after the year they cease to live together in which to make a no gain, no loss transfer, with no time limit when the transfer is part of a divorce agreement covered by a court order.
With financial matters becoming increasingly complex, combined with delays in the courts, many divorces are taking longer to complete, so this change is important and valuable for many couples.
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Liz is a Partner and Head of the Family law team at Chattertons Legal Services, dealing with family law cases in Grantham and Stamford.