Couples whose marriage or civil partnership ends formally in divorce or dissolution will get longer to make a fair and tax-efficient distribution of assets between them under new rules.
At present, the Capital Gains Tax (CGT) rules mean such couples can transfer certain chargeable assets between them without CGT on a ‘no gain, no loss’ basis within certain time limits. This window is only open until the end of the tax year of separation. After that, transfers are treated as normal disposals for CGT purposes.
Under the new proposals, planned for disposals on or after 6 April 2023, couples will have up to three tax years from the year they stop living together to make no-gain or no-loss transfers of assets. When the assets are the subject of a formal divorce agreement, they will have unlimited time to do this.
There are also modifications to the Private Residence Relief rules as they apply when a spouse or civil partner moves out of the former shared home. These aim to ensure that Private Residence Relief operates more fairly, allowing relief for the period between moving out and sale to a third party. If this is an area of relevance to you, please speak to your RfM advisor for guidance. Alternatively, enquire online or contact one of our offices.