Proposal to extend Capital Gains Tax deadline for divorces

Jun 7, 2021
Author: Craig Walker
Capital Gains tax divorce

A report published by the Office of Tax Simplification (OTS) has recommended extending the deadline by which divorcing couples are able to claim spousal exemption on Capital Gains Tax when dividing their assets.

Married couples or civil partners can transfer assets between them without triggering an immediate Capital Gains Tax charge.  Divorcing or separating couples continue to benefit from this rule in the tax year in which they separate.  However, after that, transfers take place at market value in accordance with the normal Capital Gains Tax rules.

In 2020 it took an average of a year to secure a divorce in England and Wales.  The report found that many people consider that limiting the tax rule about these transfers to the tax year of separation gives couples inadequate time to reorder their affairs.

The OTS recommends that the government extend the operation of this rule to the later of:

  • the end of the tax year at least two years after the separation event, and
  • any reasonable time set for the transfer of assets in accordance with a financial agreement approved by a court or equivalent processes in Scotland


More from our tax experts

You can find all of our latest tax articles and tax resources here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Free initial meeting

Craig Walker

Tax Director, Sheffield

More similar content

Advisory fuel rates for company cars
Advisory fuel rates for company cars

HMRC has published new advisory fuel rates for company car users which take effect from 1 December 2023. Advisory fuel rates have increased by 1p for petrol cars with an engine size of 1400cc or less and over 2000 cc. LPG fuel rates have increased by 1p in for engines...

Tax return tips for self-employed business owners

As a self-employed business owner, you may find it hard to keep on top of tracking accounting records, taxes and expense claims when submitting your self-assessment tax return. Hiring an accountant could benefit you with the following points. There are many different...