From 6 April 2023, some of the capital gains tax (CGT) advantages of being married have been extended to last for longer post-separation.
Separating spouses or civil partners can continue to transfer most assets to each other without paying any CGT on any increase in value for up to three years after the tax year of the separation (or the date of divorce if earlier). Assets which form part of a formal divorce settlement are not subject to a time limit at all. In both cases, CGT on any such asset will effectively only be realised when the receiving spouse or civil partner subsequently disposes of the asset.
Relief from CGT on the former marital home can also be retained by a partner who has moved out, yet retains an interest in the property, as long as no other property has been nominated as their Principal Private Residence since.
The relaxation of these rules provides some welcome respite for couples at what is often a very difficult time.
If you need support with the financial or tax implications of separation or divorce, please get in touch with one of our Private Client team.
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