Divorce and tax.
Updated: Mar 18, 2020
For detailed tax advice you need to contact me personally, but there are a couple of simple points to bear in mind : –
A transfer of property which is made pursuant to a court order in divorce proceedings is exempt from SDLT (“Stamp Duty”). This exemption can also apply where a court order is intended but not actually in place.
A transfer of an asset (or of a share of an asset) made between a husband and wife who are separating can give rise to a charge to Capital Gains Tax, unless the transfer takes place before the end of the tax year in which they separate. This is so whether or not the transfer is pursuant to any court order. CGT is payable by the person who transfers the asset, and they are obliged to notify HMRC of the transfer within 28 days unless the transfer takes place before the end of the tax year in which they separate, in which case there is no requirement to report. Your home is likely to be exempt from CGT, as is the transfer of a share in a pension scheme, but you should think very carefully about the CGT consequences of transferring other assets, such as second properties, shares, and business assets etc.
John Pratley is an expert divorce lawyer, who has more than 25 years experience advising clients purely about divorce and related family law issues, such as the financial consequences of separating and divorcing. After establishing the first niche family law practice in Bristol, and going on to senior management roles in a national firm, John set up Apple Tree Family Law in 2018. Apple Tree Family Law solicitors specialise in advice about divorce and financial issues.
We are based in Bristol and Exeter, but we have clients all over the UK and further afield. We offer, simply, clear and accurate advice about divorce and family law issues, and the very best client service, for a clear and reasonable price.