Have Tax Questions? Ask a Tax Expert for Answers ASAP
Hi.If the exchange occurs in the tax year of separation, as defined on page 3 of HS281 here, there is no gain, no loss for either party.If the exchange occurs after the end of the tax year in which separation occurs, the tax position depends on the stage at which you are in the divorce proceedings. If the transfer occurs before the Decree Absolute, then market value is used as you and your spouse are connected parties. If it occurs after Decree Absolute, then any gains are losses are based on the sums which exchange hands. Take a look here for more information.As you are simply swapping joint interests in properties and there may be no cash involved, you can make a claim under Section 248 A - E Taxation of Chargeable Gains Act 1992 for a no gain, no loss situation to apply. There may be some CGT involved if a cash payment is made to equalise the exchange. Read about that here and here.I hope this helps but let me know if you have any further questions.