Malcolm Finney looks at the government’s proposals regarding capital gains tax and separating spouses.
New legislation is to be introduced in Finance Bill 2022-23 regarding the capital gains tax (CGT) treatment on inter-spouse asset transfers upon separation, including transfers of interests in a main residence.
The new legislation will be effective with respect to inter-spouse asset transfers occurring on or after 6 April 2023.
Proposed new rules vs current rules: Inter-spouse asset transfers
TCGA 1992 s 58 currently provides that asset transfers between spouses (or civil partners) who are living together (TCGA 1992 s 288(3); ITA 2007 s 1011) are treated as taking place at no gain/no loss. Thus, transfers made after the end of the tax year of separation are treated as occurring at market value, as the spouses are then treated as separated but still
