More flexibility for separating couples on the way
In 2021, the Office of Tax Simplification (OTS) recommended that the current window for separating couples to transfer assets without triggering a taxable gain should be extended. Why is the draft legislation better news for couples than first anticipated?
Currently, where spouses (or civil partners) separate in a way that is likely to be permanent, there is a limited period of time for them to reach an agreement regarding transferring assets to one another without triggering a taxable capital gain. The window slams shut at midnight on 5 April of the year of permanent separation. This has long been criticised, as those separating late in the tax year may have mere days to effect transfers efficiently. It initially appeared that the government would extend the window to the end of the tax year following the year of permanent separation. However, draft legislation published in July 2022 makes clear that from April 2023 spouses and civil partners will have three full tax years following the year of separation to transfer assets with no capital gains tax consequences.
Related Topics
-
Selling spare items to your company
You’re short of cash but if you use the traditional methods to take more money out of your company you’ll pay higher rate taxes. Is there another way to extract profits without paying income tax or NI?
-
No such thing as a (tax) free lunch?
You run a small consultancy company and treat your staff to lunch in the office once a week. Your bookkeeper says it’s a taxable benefit in kind because staff lunches are only exempt if they are provided in a workplace canteen. Is this correct?
-
Judge criticises use of fabricated AI-generated cases in HMRC appeal
A tax tribunal judge has criticised the use of apparently fabricated case references generated by artificial intelligence in an appeal against HMRC. The incident highlights growing concerns over the use of AI tools in legal and tax proceedings. What happened?