Divorce now to save tax

Over my 25 years plus dealing with divorce, there are many reasons I have heard to get a divorce but only once did I hear tax as one of them! But if you separated in this tax year and are going through a divorce do bear in mind the Capital Gains Tax situation.

Of course, the 2009/2010 tax year runs until 5th April 2010, but watch out as any married couples special tax treatments end when the tax year they separated ends. So if you separated in, say, May 2009 you need to sort out your CGT situation and claim the tax relief before 5th April 2010.

CGT is normally payable on the increase in value of assets such as certain property and shares when they are transferred. But in the tax year of separation it is not payable. After that it may be.

So, if you are close to sorting out a divorce settlement and maybe just a little way away from agreement consider giving ground after taking tax into account and save legal costs into the bargain!

Andrew Woolley
Divorce lawyer