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TaxRobin
TaxRobin, Tax Consultant
Category: Family Law
Satisfied Customers: 31049
Experience:  International tax
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We are about to start divorce proceedings which we are

Customer Question

We are about to start divorce proceedings which we are hoping can be amicable. We have three properties- marital home and two buy-to-lets, all of which are mortgage free and all of which are shared ownership. We need advice on how we avoid CGT liability. The aim is for each property to be owned outright by one party or the other
JA: Where are you? It matters because laws vary by location.
Customer: Liphook, Hampshire
JA: What steps have you taken so far?
Customer: None- we don't want to start the divorce process until we are absolutely clear on CGT liability. None of the properties are to be sold but a CGT liability will run to tens of thousands
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: We need to be aware of divorce grounds (eg separation rules) before we go forward with applying
Submitted: 16 days ago.
Category: Family Law
Expert:  TaxRobin replied 16 days ago.

HMRC link for reference https://www.gov.uk/government/publications/husband-and-wife-civil-partners-divorce-dissolution-and-separation-hs281-self-assessment-helpsheet/hs281-spouses-civil-partners-divorce-dissolution-and-separation-2016

If you and your spouse or civil partner are living together, any transfer of an asset between you is treated as giving rise to neither a gain nor a loss to the person transferring it. Any amount actually paid is ignored. If the person receiving the asset later disposes of it, he or she will be treated as if they had paid an amount equal to the total of your costs.

If you or your spouse or civil partner were living together at some time in a tax year, you can transfer assets between you at any time in that tax year at no gain/no loss. There’s no requirement that you should be living together at the time of transfer.

Customer: replied 16 days ago.
I don't think that really answers my question as well as I'd like. Our intention was to use 2 years separation as the grounds for divorce, however it seems like that would leave us CGT liable. Is that the case?
Expert:  TaxRobin replied 16 days ago.

Yes

Expert:  TaxRobin replied 16 days ago.

You need to transfer closer to time you are separate.