The government announced in the 2013 Autumn statement that there will be some changes to Capital Gains Tax (CGT) from 5 April 2014, which may motivate those separating to act promptly and reach an agreement in relation to the former family home.
Currently if you and your partner own and live in a house which is your main residential property and if you decide to separate, the party who leaves the house has three years to dispose of the property before CGT arises. That could be via a transfer to your former partner or sale.
From 5 April 2014, this length of time will be reduced to 18 months. This applies if you are living with a partner and separating or if you are married.
Any tax liability may have an impact, as it could reduce the capital you have available in order to buy a new house and move on. The gain is calculated and apportioned over the time you owned the property and not just from separation. As solicitors we are unable to calculate the gain for you but we can refer you to trusted accountants who can advise and guide you.
Family law is complex and expert advice early on is essential, for further information please contact a member of our Family team on 0161 475 7676.
