Capital taxes following separation, divorce or dissolution

Information

Capital Gains Tax

Capital Gains Tax (CGT) is a tax on the profit made on the disposal of any asset and is payable by the person making the disposal. Disposal can be by way of gift or sale.

Transfers of assets between spouses or civil partners are exempt from CGT. Transfers of assets between spouses or civil partners who are separated are exempt from CGT if they are made under a separation agreement or a court order.

Transfers of assets between spouses or civil partners on foot of a court order in a decree of divorce or dissolution are exempt from CGT but transfer of assets after the granting of the decree that are not ordered by the court are not.

Separating couples should always seek specialist tax advice before entering into arrangements that have Capital Gains Tax implications.

Capital Acquisitions Tax

Capital Acquisitions Tax (CAT) is a tax on gifts and inheritances received by a person. The person receiving the gift or inheritance pays the tax. The tax is paid on the open market value of the asset being received.

Transfers of assets between spouses or civil partners whether by way of gift or inheritance are exempt from CAT. Separation does not affect this exemption but divorce or dissolution does.

CAT does not apply to a property transfer, ordered by a court, between separated or divorced marriage partners.

Separating couples should always seek specialist tax advice before entering into arrangements that have Capital Acquisitions Tax implications.

Stamp duty

Stamp duty is a tax most often associated with the transfer of property whether by way of gift or sale. Transfers of property between spouses or civil partners are exempt from stamp duty. Transfers of property between spouses or civil partners who are separated or divorced, which are ordered by a court, are exempt from stamp duty.