UK Government Issues Draft Legislation To Lighten CGT Burden For Separating Couples

Many couples are surprised to discover that transfers of assets from one to the other on relationship breakdown can result in capital gains tax liabilities if transfers are not exempt or are made after the year of separation. But draft legislation which has just published suggests those rules are about to change. This is good news for those who have already separated (or who are considering it) and who need to work out how best to sort out their finances in the most tax efficient way. In this article, we explain what the current position is and how the proposed rule change will benefit clients separating couples once the new rules apply.

Married couples ¹ can usually transfer assets (such as properties, shares or businesses) between themselves without any tax implications arising at the time of transfer (known as ‘no gain/no loss' treatment). Specifically, if the first spouse gives or sells an asset to the second spouse, the second spouse will be deemed to acquire