Tax and Divorce: What to Expect

If you are in the process of going through a divorce there are several routes you may take when it comes to your money and property. 

If you can agree

If both parties in the divorce can agree and cooperate, you can avoid all official paperwork declaring how to divide money and property. However, this agreement won’t be legally enforceable by the court.

In order to make your agreement legally binding you must have a solicitor draft a ‘consent order’ and ask the court to approve it.

A consent order is a document that confirms the agreement and includes details over how your assets are going to be divided up.

If you cannot agree

If both parties cannot come to an agreement over the dividing of their assets, after going through mediation, the court can be asked to make a ‘financial order’. The outcome of this can be:

·      A lump sum payment

·      Ownership of property

·      Regular maintenance payments to help children or living expenses

·      A share of your partner’s pension payments

The judge will decide how your assets should be divided according to you:

·      Ages

·      Ability to earn

·      Property and Money

·      Living expenses

·      Standard of Living

·      Standard of living

·      Role in the marriage or civil partnership

Tax on transferred assets

You are not typically required to pay Capital Gains Tax when transferring assets to your partner. In the instance of transferring assets to your ex-partner, you may be subject to paying capital gains tax.
The rules for working out your gains and loss are extremely complex.

For expert advice on Capital Gains Tax on Divorce contact us