Capital Gains Tax changes to relieve financial pressure on divorcing couples
Changes to Capital Gains Tax that reduce the risk of expensive tax bills for divorcing couples have been welcomed by Thursfields Solicitors.
An expert at the leading Midlands law firm was commenting after news that Capital Gains Tax (CGT) rules for divorcing couples are set to change next year.
Thursfields Explain…
Shane Miller, a director and head of the Family Law department at Thursfields, explained that currently, if a couple transfers assets between them any time after the tax year in which they separated, there may be a tax to pay.
She said: “The new rules, which come into force on 6 April 2023, will give couples three tax years from the split to share assets 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 rules around property are also changing to allow those who have moved out of a marital home but kept a share in it to be able to claim Private Residence Relief if the property is sold 12 months after the liability is triggered.
“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.
“These are welcome changes, because currently the law does nothing to assist those separating who are already facing horrendous financial bills.
“There’s already enough financial stress and emotional pressure for couples who are splitting up, and on top of that they have the extra strain of having to split finances before the end of the tax year.
“These changes will therefore be a huge relief, especially for couples going through more complicated separations, because it will give them more time to come to an agreement and will reduce the financial cost.”
Looking for some advice?
Anyone seeking advice on finance during a divorce can contact Shane Miller on 0345 20 73 72 8 or by e-mailing smiller@thursfields.co.uk.
