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
-
The tax incentive to do a thorough stock-take
The annual stock-take isn’t exactly your favourite thing to do. You know resources could be better spent elsewhere so you try to get through it as quickly as possible. Why might it be worth a little more of your time?
-
Unused sales suppression tools can still trigger penalties
HMRC has published a new compliance factsheet explaining the penalties that can apply where a business possesses an electronic sales suppression (ESS) tool, even if it has never actually been used to suppress a sale. What do you need to know?
-
Accounting for VAT if there is no cash payment
Your business has submitted repayment returns for the last two quarters and you are concerned that you might have underpaid output tax on some supplies where no money has changed hands. Are your concerns justified?