Proposed new CGT legislation for transfers of assets between separating spouses and civil partners

Stone King Partner Tracey Smith has welcomed draft legislation which aims to make the distribution of assets fairer for separating couples.

‘Capital Gains Tax: transfers of assets between spouses and civil partners in the process of separating’ was published last month (July 2022) to amend CGT rules within the Finance Bill 2023.

“It will be very beneficial to couples who have separated and wish to transfer assets,” said Tracey, Head of Stone King’s Family Team.

“The proposal is that the one-year period of no gain no loss is extended to three years.

“This will give parties much more time to deal with the financial aspects of their separation and limit their potential liability for CGT.”

The draft legislation seeks to makes changes to the rules that apply to transfers of assets between spouses and civil partners who are in the process of separating.

In addition, it allows for unlimited time when the assets are the subject of a formal divorce agreement.

The aim is to make the process fairer for spouses who are separating or divorcing, and are in process of distributing assets between themselves.

Consultation on the Bill completes September 2022 with the amendment planned for April 2023.

The consultation document can be read in full here.