• Published Date

    January 6, 2019
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PROMOTION Taxing times: divorce and taxation The date of a couple's separation can have an impact on the amount of tax they must pay. Sarah Wals, a partner at Stephens Scown in Exeter has supported business owners, famies with significant wealth and high eamers through the divorce process. She explains more in this articke shareholdings, business assets-either any people do not fully understand the difference between divorce and separation in your sole name or in joint names and transfers are not made between you in the taxyear of separation, there For capital gains tax purposes it can coud be an immediate tax charge if be the date of separation, not the date thepeopenty is transferred afoer the of the divorce which is impoetant end of the taxyear A relationship beeak down isa stressful andemotionallydraining individual's annual exemption(which time, It canbe hardto reemain practical when such strong emotions atarate of to percent Soe basic rate are involved. However, sometimes ensuring that your head rules your heart is important, One of those times value of the assets imvolved, the sums is when deciding to separate, as the invohed could be significan timing of thiscan have a significant impacton the tax you must pary Any chargeable gains over an is currently £11,700) are subject to CGT tax payers and20percent for higher rate tax payers. So, depending on the Take advice before you separate Ie is always worth taking legal advice before you separate-even more so a this time of yearwhen theend of the Capital Gains Tax liabity You do not usually have to pay Capital Gains Taxif yougive assets t0 taxyear is in sighe. It is allso advisable your husband, wie or chil partner. However, you may have to pay this tax tospecific Capital Gains Tax and on assers you transfer so your foenser xenquiries partner afteryour relationship mds. to involve an accountant in relazion Anotherissue to be aware of is The end ofthe taxyear 5 April)is capital gains tax changes peoposed in an important time panticularly for couples who have separated in that nt tax year, The opportunity to transfe assets between spouses without capital gains be lost if the asset transfer takes place the badget which will have an ingact the use of PPR(principle private rdence reliel).At present a house owner has 18 months from when they move out to sell a property without beingliable for CGT,however i is proposed that this should be reduced tonine months. These changes wil take effect in April 2020 after the end of the taxyear If you have maltiple properties, Sarah Walls is a partner in the fomily team at Stephens Scown. The team has top ranking in both Legal 500 and Chambers UK. Sarah specialses in me financial aspects of relationshp breakdown portatarly high vekand cornglex fancial work, To contact Sarah, ple socat: 01392 210700 email solicitors or visit