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March 8, 2019 By Beverley Addison

The Divorce Tax? Your need-to-know before 5 April

With the financial year end looming, finances and tax are hot topics on everyone’s mind at the moment. If you are separating, your divorce may be the last thing you think has year-end consequences, but if you are considering transferring assets between you then it is important that you seek professional advice before the year end on 5 April 2019.

tax-year-endThis is because tax may be able to be minimised when transferring assets if you act before the year end, leaving more in the pot to be distributed between you.

The implication of the year end mostly impacts on Capital Gains Tax (‘CGT’). This is because spouses are treated as ‘connected parties’ for CGT purposes. Connected parties are able to transfer assets between them (for example, property, shares or investments) on a ‘no gain, no loss’ basis.

‘Connected Persons’

Crucially, you will continue to be classed as ‘connected persons’ up until the last day of the financial year in which you separated. This means that if you transfer these assets during the tax year in which you separate then you can continue to rely on your connected person status when making the transfer, meaning there is no immediate CGT liability for either the transferee or transferor. By contrast, if you made the same transfer in the tax year following separation, there may be an immediate CGT liability assessed against the transferor, but at market value. Any transfers made post-divorce would be assessed on the actual consideration received.

So what does all of this mean for you?

If you are thinking of transferring assets between you and your spouse on divorce, it is important that you act fast and obtain specialist advice before the year end.

It is especially important to take specialist advice prior to coming to any agreement with your spouse for financial provision, to ensure that you are leaving as much as possible in the matrimonial pot for division at the end of the day.

At BTO we have both specialist family law and wealth planning teams who can assist if you think this will impact you. Click here to get in touch.

More to Read

Bankruptcy and DivorceDivorce and Bankruptcy Divorce Myths Busted!Some Urban Divorce Myths – Busted! When is Generosity a bad thing? Tax tips on divorce – avoiding the bear traps!

Filed Under: Finances, Separation and Divorce Tagged With: CGT, connected persons, divorce, transferring assets

Beverley Addison

Beverley Addison

Beverley is a Senior Solicitor within our Family Law team who specialises in fertility law, including the law of surrogacy, IVF and becoming parents in a modern family. She is experienced in dealing with all aspects of family law including financial provision on separation and divorce, cohabitation and cases relating to children. Read Beverley's professional biography.

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I still get to see my kids 3 times a week

Just wanted to say a huge thank you for your help and representation today. It’s such a relief to hear that I still get to see my kids 3 times a week. Also last but by no means least can you pass on my profound gratitude to Counsel who was a star !!!!

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Marjory, I just wanted to say thanks very much for your help right throughout the case. Lately, the ad hoc support has been invaluable and given me the confidence to keep representing myself and not feel pushed into agreeing something I’m not comfortable with. I appreciate how difficult it must be to provide support when… Read more “I certainly feel like a weight has been lifted off my shoulders”

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Lesley, thank you so much for all your help. It turned out to be a very uncomplicated matter in the end and probably not the most interesting for you. However our anxieties were greatly alleviated with your advice and work

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Debbie, I would just like to thank you for your help during this extremely difficult time. I really appreciate it.

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Their service and support has been excellent

After quite a complex case, I can say that their service and support has been excellent.

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Thanks Marjory, it’s all starting to come together.. thanks to you…:)

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Things have been finalised in about twelve weeks

Amanda, many thanks for seeing all this through for me. I cannot believe that after the best part of two and a half years of frustration (pre BTO), things have been finalised in about twelve weeks.

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Thanks for all the expert guidance through a trying situation

Hi Marjory, my daughter and her son are doing great. Everything seems to have calmed down. She and her husband finished the mediation process after a couple of visits as they both felt they had to step up to the mark for their son’s sake not for personal reasons. Once again thanks for all the… Read more “Thanks for all the expert guidance through a trying situation”

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I came out of your offices feeling great!

Marjory, thank you for a really positive meeting on Friday. I feel things are a lot clearer in my head – I came out of your offices feeling great!

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Guiding me through a difficult time

Lesley, I would like to take this opportunity to thank you for your professionalism. Guiding me through a difficult time, also your understanding and empathy as to my personal situation. I would not hesitate in recommending your services to others.

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I will definitely recommend you…

Hi Marjory, thanks again for being an absolute joy to work with during this unknown and nerve-wracking process. You made me feel calm and reassured throughout (not an easy task). I will definitely recommend you to anyone else looking for representation.

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Outstanding job…

Marjory… you are doing an outstanding job… Thanks again for your support and expertise in helping me navigate through this horrible situation. I really appreciate it.

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Great service

Beverley thank you so much for all your hard work and making things run as smoothly as possible. Great service.

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Forever I will be grateful…

Marjory, forever I will be grateful and thankful to you for all the hard work you did for me and my family. Thank you very much again and again. I am so very blessed in life that I found a lovely understanding person like you. Not many lawyers would say go and have a cup… Read more “Forever I will be grateful…”

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Your advice has been incredibly helpful

Beverley thank you for everything you’ve done regarding my case and for your assistance in getting the many issues resolved and matters concluded. Your advice has been incredibly helpful and greatly appreciated. Should I require any further assistance, I will be in touch.

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Approachable and sensitive manner

Marjory, thank you very much for your very approachable and sensitive manner during our meetings.

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From our first meeting, I felt confident…

Hi Debbie, I wanted to take this opportunity to pass on my gratitude to you for getting me through this. From our first meeting, I felt confident and assured to be in your safe hands and that never changed during the last 18 months. Whilst it is a great relief to have this finished I… Read more “From our first meeting, I felt confident…”

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Wonderful job

I would like to thank you Lesley again for the wonderful job you and your team did for me at a very difficult time in my life.

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We would not have managed this without you

Marjory, I think we can all honestly say that we would not have managed this without you, truly you have been an absolute star and we are all very thankful.

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Very approachable manner

Many thanks Marjory for your very approachable manner during our meetings.

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I won’t hesitate to put them in touch with you

Looking back I wish my ex-wife and I would have gone down the collaborative divorce path but as you know she chose a very different way which ended up being most certainly a longer, more stressful and more expensive path for both of us. Should I ever hear of anyone whose marriage has reached that… Read more “I won’t hesitate to put them in touch with you”

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Financial knowledge and gravitas

Lesley has financial knowledge and gravitas. I think she is faultless.

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I have come out of the process a much stronger person

I would have no hesitation recommending Lesley Gordon to anyone I know who needs the services of a divorce lawyer. It was a very positive experience all things considered and I have come out of the process a much stronger person thanks to Lesley.

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Always appreciated being able to rely fully on you and the team

Amanda and Lesley, thank you to you both for all your help, now and during last year, and, as I said before, I have always appreciated being able to rely fully on you and the team at all times. Obviously, a very sad time for me but I am relieved that it is at an… Read more “Always appreciated being able to rely fully on you and the team”

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I was very pleased with how things went today

Hi Beverley – I would just like to email you to thank you for your services today and commend you on doing a stellar job. I was very pleased with how things went today. The level of professionalism you showed was much to my satisfaction and greatly appreciated. I felt very relaxed at having you… Read more “I was very pleased with how things went today”

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Efficient and smooth service

Debbie, could I take this opportunity to thank you for the efficient and smooth service you have provided, and particularly, in our first meeting when you listened to my concerns and really helped explain things and put my mind at ease.

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I am eternally grateful

I am in no doubt I have made the correct choice by having BTO Solicitors represent me in such a difficult time. I am under no illusion you and your team will continue to do the best for me in future. Many many thanks for today. I am eternally grateful.

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An Excellent Lawyer…

Beverley thanks for all your assistance with everything. It’s much appreciated and rest assured should I ever need an excellent lawyer in the future you will be the first to be called.

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I would like to thank my exceptional Scottish team

My dear legal team! I have been writing this letter of thanks in my head since about two months ago, and didn’t know it would take a bit longer than expected to actually be able to express my deep gratitude to you ALL for winning this tough and enduring process for me……I would like to… Read more “I would like to thank my exceptional Scottish team”

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You have smoothed the pathway with your efficiency

Amanda…May I take this opportunity to thank you for your help in these matters. Although I am a resilient person, it has not been easy, but you have smoothed the pathway with your efficiency…

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Help guiding us through a very stressful time

I would like to thank you again for all your work and help guiding us through a very stressful time.

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After all these years I’m finally free

Thank you so so much Amanda. Actually there’s no words to thank you. I feel great. After all these years I’m finally free. Thank you.

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Risk assessed everything

They explained everything to me very clearly and we looked at every permutation and possible outcome and risk assessed everything.

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My recent collaborative process

Dear Marjory, I just wanted to say a huge thanks for all your help, advice and counsel throughout my recent collaborative process. You definitely made a difficult process easier for me. Thank you.

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