Financial and tax advice on separation and divorce

For CGT purposes, transfers of assets between married couples or civil partners are generally treated as taking place on a no gain, no loss basis.

In practice, this means:

• The person transferring the asset does not usually pay CGT at the point of transfer,
• The receiving party inherits the original base cost of the asset,
• The tax exposure is often deferred rather than eliminated entirely.

In other words, the tax liability may simply move further down the line.

Understanding the future tax position attached to transferred assets is therefore critical when assessing the real value of a settlement.

At Wilson Partners, we regularly support clients and legal advisers with hypothetical CGT calculations, future tax exposure analysis and planning around the timing and structure of asset transfers.

Tax rules around separation and divorce changed significantly from April 2023.

Following the introduction of no-fault divorce legislation in April 2022, the government introduced updated CGT rules to give separating couples more time to transfer assets tax efficiently.

In many cases, no gain, no loss treatment can now apply:

• For transfers made within three tax years after the tax year of separation, or
• Without a time limit where transfers are made as part of a formal divorce agreement or court order.
• The structure and wording of agreements can materially affect the tax outcome.
• We regularly work alongside family lawyers and advisers to help ensure agreements are drafted clearly and with the intended tax treatment in mind.

For many couples, the matrimonial home represents both emotional and financial complexity.

While Private Residence Relief, sometimes known as Main Residence Relief, can often exempt gains arising on the sale of a main residence, separation can create additional considerations, particularly where one spouse leaves the property before it is sold.

Important questions can include:

• Has one spouse moved out?
• Will the property be sold immediately or at a later date?
• Is one party entitled to future sale proceeds?
• Have elections been made regarding the main residence position?
• Was part of the property used for business purposes?
• Are there periods of non-occupation to consider?
• Does the property include land, annexes or outbuildings that may fall outside relief?

The timing of separation, occupation and transfer arrangements can significantly affect the availability of reliefs.

Early advice can materially improve outcomes.

Our team advises on Private Residence Relief, elections, future CGT exposure and the longer-term tax implications attached to retaining or transferring property assets on divorce.

Where business interests form part of a divorce settlement, understanding the practical financial reality behind the valuation is equally important.

The headline value of a business does not always reflect what a shareholder can realistically access or extract after tax.

Liquidity constraints, shareholder structures, future income, retained profits and extraction costs can all materially affect the outcome.

Wilson Partners supports clients and advisers with business valuations, settlement scenario modelling and commercial analysis to help provide greater clarity around the wider financial implications of a settlement.

Ultimately, divorce settlements involving businesses, property or investments are rarely just about the figures on paper. Understanding the tax position, future liabilities and practical financial implications can materially affect the outcome both now and in the future.

At Wilson Partners, we work alongside clients, family lawyers and professional advisers to help bring clarity to financially complex situations, supporting more informed decisions through commercially grounded tax advice and valuation insight.