Capital gains tax after seperation

beekeeper54

I have been seperated since 2016, and am not divorced although I have a decree nisi . We bought this house in 2006 and both lived in it until 2016. It is still my primary residence. My ex is living in rented accommodation  with his new partner and that is in her name. He has not bought another house. If he either gives his share in this house to me, or sells it to me, would he be liable for Capital Gains Tax? It is a smallholding
. 

sheramber

Your spouse or civil partner

You do not pay Capital Gains Tax on assets you give or sell to your husband, wife or civil partner, unless:

• you separated and did not live together at all in that tax year
• you gave them goods for their business to sell on

The tax year is from 6 April to 5 April the following year.

https://www.gov.uk/capital-gains-tax/gifts#:~:text=You%20do%20not%20pay%20Capital,all%20in%20that%20tax%20year

Jeremy535897

Read https://www.gov.uk/government/publications/husband-and-wife-civil-partners-divorce-dissolution-and-separation-hs281-self-assessment-helpsheet/hs281-capital-gains-tax-civil-partners-and-spouses-2025#capital-gains-treatment-in-the-years-following-permanent-separation

"If you and your spouse or civil partner were living together at some time in a tax year, you can transfer assets between you at no gain or loss any time up to earlier of the end of the third tax year after that in which you ceased to live together or the date on which a court grants a divorce or annulment of marriage, or dissolution or annulment of a civil partnership.

Transfers of assets between you or your spouse or civil partner in accordance with a formal divorce or separation agreement or court order will be at no gain or loss without any time limit."

You are clearly past the three years, but if you finalised a divorce and it was a condition of the divorce that the property was given or sold to you, it should be transferred at no gain no loss.

If that doesn't apply, then the transfer will be at market value, because it will be an uncommercial transaction, but also because you are connected persons until the decree absolute. The gain will be reduced by roughly half, as it was his main residence for roughly half the ownership period (he will also include the last 9 months of ownership in the exempt period). If your smallholding extends to more than half an acre, not all of the land is likely to be within the main residence exemption.