Divorce & Capital Gains Tax Help Please

Sugarloaf

Can anyone help please with regards to capital gains tax on jointly owned rental properties. I already have the decree nisi and we are due back in court on the 18th Feb. I understand that transfer of equity in the year of separation does not attract CGT i.e in our case before 5th Apri 08, but will capital gains tax have to be paid on transfer of equity to each other after April 5th 08 if we do not transfer or sort the divorce out before then? I have broached the subject with my solicitor but she just advised to find an accountant, I would have thought she would have advised me about CGT ages ago! I called my accountant and she said she couldn't help as she is up to her eyes in work with the 31st Jan deadline. I have tried to contact the Inland Revenue but haven't managed to get through over the past 2 days. Also read the help sheep IR 81 and googled, but I am still not sure.

Thank you for your help.

jimmo

Its all in the help sheet but the latest version is HS281 here http://www.hmrc.gov.uk/helpsheets/hs281.pdf
I don’t know whether I am stating the obvious but the date of separation is the date that you ceased to live together as man and wife. The date of the decree nisi or decree absolute is irrelevant for Capital Gains Tax purposes.

In a year where a husband and wife are living together any transfer of assets between them takes place “at a value which produces no gain and no loss”.
In practical terms this means that the individual who ends up owning a particular property is treated as if he or she had originally bought in their own name. No Capital Gains Tax is chargeable on the transfer but when the property is sold the individual who sells it will be liable for the whole gain from original acquisition.
If the transfer takes place after the end of the tax year in which the separation takes place then the special treatment afforded to married couples who are living together is no longer available and the person who transfers his or her share of the property to the ex spouse is liable to Capital Gains Tax.
Maybe the official instructions may make more sense than the help sheet for you. http://www.hmrc.gov.uk/manuals/CG1manual/CG22400.htm
I noticed that you referred to properties, not property. If you jointly own a number of let properties there is a further possible relief and this link is to the contents page of the instructions. http://www.hmrc.gov.uk/manuals/cg4manual/cg73000+.htm
To be frank, if you do have a number of properties I think you would be very unwise if you do not get the solicitor and accountant to sort it out between them.