CGT changes affecting asset disposal in divorce cases

HMRC issued a press release on 20th July 2022 setting out proposed legislation to change Capital Gains Tax (CGT) in divorce cases, aimed at easing the burden of CGT on transfers between parties to a divorce.

CGT changes

The proposed changes are for disposals of assets between divorcing spouses from 6 April 2023, the main points are:

  • The window for the CGT-free inter-spousal exemption on transfers of assets increases up to three years after the tax year of separation (currently, only transfers in the tax year of separation can avail of this exemption) and 
  • More broadly, where the asset transfers are the subject of a formal divorce agreement or court order, there is an unlimited period for the exemption to apply
  • The reliefs around CGT on sale of an interest in the former matrimonial home are being expanded, to widen the scope of Private Residence Relief

The legislation will be included in the forthcoming Finance Bill 2022/23. The press release is on HMRC’s website at the following link:

HMRC - CGT changes

More details on the impact of these proposed changes available from GMcG’s Tax & VAT Solutions team:

Belfast - 028 9031 1113

Lyn Canning Hagan

Paul O'Connor

Helen Allen

Lisburn - 028 9260 7355

Christine Harrison

Portadown - 028 3833 2801

Ruth McCormack