More flexibility for separating couples on the way
In 2021, the Office of Tax Simplification (OTS) recommended that the current window for separating couples to transfer assets without triggering a taxable gain should be extended. Why is the draft legislation better news for couples than first anticipated?
Currently, where spouses (or civil partners) separate in a way that is likely to be permanent, there is a limited period of time for them to reach an agreement regarding transferring assets to one another without triggering a taxable capital gain. The window slams shut at midnight on 5 April of the year of permanent separation. This has long been criticised, as those separating late in the tax year may have mere days to effect transfers efficiently. It initially appeared that the government would extend the window to the end of the tax year following the year of permanent separation. However, draft legislation published in July 2022 makes clear that from April 2023 spouses and civil partners will have three full tax years following the year of separation to transfer assets with no capital gains tax consequences.
Related Topics
-
Alternative education providers can protect VAT refund claims
HMRC has confirmed that some alternative providers of higher and further education can submit VAT refund claims following a Court of Appeal ruling, despite HMRC appealing the decision to the Supreme Court. What do you need to know?
-
Old IHT forms will be rejected
HMRC has stopped processing old versions of the Inheritance Tax IHT100 forms from 31 August 2026. Anyone reporting an IHT chargeable event involving a gift or trust will need to make sure they are using the correct forms. What do you need to know?
-
The tax incentive to do a thorough stock-take
The annual stock-take isn’t exactly your favourite thing to do. You know resources could be better spent elsewhere so you try to get through it as quickly as possible. Why might it be worth a little more of your time?