By Rebecca Horne-Smith
Legislation day was 20th July and this saw new draft legislation issued for rules surrounding disposals in connection with divorce etc. These new rules will come into effect for disposals made on or after 6th April 2023, although are subject to change before the publication of the final Finance Bill in the Autumn.
- separating spouses or civil partners be given up to three years after the year they cease to live together in which to make no gain or no loss transfers
- no gain or no loss treatment will also apply to assets that separating spouses or civil partners transfer between themselves as part of a formal divorce agreement,
- a spouse or civil partner who retains an interest in the former matrimonial home (but vacated the property) be given an option to claim Private Residence Relief (PRR) when it is sold on the open market
- individuals who have transferred their interest in the former matrimonial home to their ex-spouse or civil partner and are entitled to receive a percentage of the proceeds when that home is eventually sold, be able to apply the same tax treatment to those proceeds when received that applied when they transferred their original interest in the home to their ex-spouse or civil partner
If you know anyone currently in this position, it may therefore be advantageous to consider the timing of such transactions. Equally, more questions to ask when getting a full PRR history.
If you have any questions relating to the above, please contact Rebecca Horne-Smith or your usual UHY Ross Brooke adviser if you would like to discuss your position.