Navigating Residential Capital Gains Tax in Divorce: What You Need to Know

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The Challenges of Divorce and Tax

Navigating through a divorce is a challenging time in anyone’s life. And while tax implications may be the furthest thing from your mind, understanding how Capital Gains Tax (CGT) applies to the division of residential property in a divorce can be crucial to ensuring a fair settlement and preventing any unexpected tax bills down the line.

Capital Gains Tax: The Basics

Capital Gains Tax is a tax on the profit you make when you sell (or ‘dispose of’) an asset that’s increased in value. In the context of a divorce, this could apply if you’re transferring ownership or selling a property.

Private Residence Relief: It can be complicated

Private Residence Relief is a significant factor in how CGT applies in a divorce. If a property has been your main home, you might be eligible for Private Residence Relief, which could reduce or even eliminate your CGT liability.

In the context of a divorce, you can continue to get Private Residence Relief on a property for up to nine months after you move out. If the property is transferred to your ex-spouse within this period, the transfer won’t attract CGT.

There is a great deal of complexity in the HMRC Guidance on this matter and we are here to help.

Transferring Property in the Tax Year of Separation has changed for the better!

April 2023 brought a change to the draconian requirement to make a ‘no gain no loss’ transfer in the tax year of separation. You now also have the three immediate tax years following separation to make a transfer on a ‘no loss, no gain’ basis

FREE CAPITAL GAINS TAX CALCULATION SERVICE

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What our customers say

Celia Prause
2. April, 2024
Great experience - I knew who I was talking to and James and Jayne were at all times friendly, competent and supportive. Even the international element didn’t deter them. An excellent service.
Katia Leonova
28. March, 2024
It is worth a lot when you can get a professional advice over the phone. Tax Bees answered my question just in minutes, in a extremely friendly manner, and with no attempts to upsell. Highly recommend them as CGT professionals!
Barry Loughran
21. March, 2024
I can only endorse all the previously posted positive reviews about this business. Friendly people and yet extremely knowledgeable and professional regarding the subject matter. A pleasure to deal with and I can strongly recommend them for all your taxation matters.
Andy Bacon
5. March, 2024
Having sold a UK residential property I had owned for 18 years I was facing a potentially significant CGT liability. Although the HMRC calculator appeared pretty straightforward I decided to approach an expert and fortunately found James just in time. I found his willingness to provide no obligation up-front advice over the phone very welcome and decided to appoint Tax Bees for peace of mind with the added bonus that his very reasonable fee might be saved when he got into the detail of my case. I certainly pays to spend some time putting together all the facts; as a result it proved very fruitful to invest in James when he significantly reduced my expected liability by many thousands compared to the HMRC online calculator. Lesson learnt - its never as simple as it first appears and not all the rules are entirely transparent!
Adam Jenkins
21. February, 2024
Tax Bees were fantastic at quickly and calmly helping us with a family tax situation. James was a reassuring presence during a stressful time. I wouldn’t hesitate in recommending him.
CLIVE WALLIS
14. February, 2024
I asked Tax bees at short notice to help out with my CGT submission, i found the team to be very efficient and very approachable . The fee was fixed .. so no nasty surprises at the end, and i believe the tax saving and peace of mind knowing that a professional had been involved is very reassuring. Thanks to James and Jayne.
Sara Barron
2. February, 2024
Thanks so much for everything and for completing our return on time. You've been so easy to work with and have done an excellent job. I found Tax Bees online and was nervous about using a service without a personal recommendation. However, I would highly recommend Tax Bees to anyone looking for help with their Capital Gains Tax, particularly James Dean, who has been exceptionally helpful and efficient from the first email enquiry and has achieved a great outcome.
tracey hale
28. January, 2024
Fantastic service very efficient attention to detail Friendly and very knowledgeable
Kate Jones
24. January, 2024
I popped into Tax Bees on the off chance that I might be able to get some help with my Self Assessment Tax Return. I drive past the building everyday and often wondered whether they would be able to help advise me. James and Jayne were so friendly and welcoming and after a nice chat and a coffee they reassured me that they could help straight away - even during the month of January which is a very busy month for them. I would certainly recommend Tax Bee's if you have any Tax needs or concerns for your business or if like me you just need help and guidance on that dreaded self assessment. James also looked into my last four years of pension tax relief and managed to get me a rebate. Very happy customer. Thanks again James and Jayne!
Melanie Palmer
22. January, 2024
We recently hired Tax Bees for capital gains tax reporting and we're very happy that we did. James was very helpful, knowledgeable and efficient. Money well spent :)