Changes to the rules on Capital Gains Tax and Divorce
The New Proposed Changes
HMRC have published a policy paper on the back of proposals from the Office for Tax Simplification to change the rules on the transfer of assets between spouses and civil partners who are in the process of separating and are no longer living together.
- Separating spouses or civil partners can transfer assets between themselves at no gain or loss at any time within three years after the year of separation regardless of whether they are still living together or not.
- A spouse or civil partner who separates and moves out of the family home but continues to retain an interest in it will be able to benefit from Private Residence Relief when the family home is sold later.
- A spouse or civil partner who transferred their interest in the family home to their ex-spouse or civil partner and are to receive a percentage of the proceeds when the family home is sold will be able to use PPR on those proceeds when received provided they applied when they transferred their original interest in the family home.
These changes are being proposed to come into effect on or after 6th April 2023 if all goes ahead.
It could well be worth the while for couples who jointly own more than one property and who are going through the divorce process at the moment to get advice on this matter.
If you have any questions on any of the subjects discussed, then please get in touch! You can call on 01243 782 423 or head to our contact form.
We also update our YouTube Channel regularly with new content, see here: Lewis Brownlee YouTube channel