When a relationship breaks down there is an enormous impact on the individuals involved. For many people, the priority is the children or how they are going to be able to afford to put a roof over their heads after the separation.
When caught up in such significant change, it is easy to overlook some of the less obvious effects of the relationship breakdown which could have a substantial financial impact. Although most of us are aware that “the only two certainties in life are death and taxes” often tax issues relating to the breakdown of the relationship are overlooked.
When considering options for settlement it is vital that you understand the tax implications of the options available to you. Money drawn from a business is likely to incur tax liabilities as will the encashment of shares and some investments. In many cases couples who own second homes together or individually need to decide whether these should be sold or transferred from one or another to allow them to rehouse. As with any disposal, there are likely to be capital gains tax implications for selling a property or transferring it. These need to be considered when looking at a divorce settlement or when leaving a cohabiting relationship.
Even the sale or transfer of the family home can have tax implications, particularly if one of the owners has left the family home for some time and regardless of whether they have bought another home. Although tax might be due on the transfer of assets, there is relief that might be available in some cases and
you need to be aware of this. The timing of the transfer or sale of the property can also be critical.
The current rules regarding taxation are due to change as a result of the proposed new revisions which will be introduced in the Finance Bill 2022/2023. These changes are due to take effect in April 2023 which could benefit individuals but again, timing is essential.
Although solicitors are not tax experts, it is important that your solicitor highlights any tax issues and refers you to specialist tax advisers, if they feel it is necessary, so that you are not adversely affected by tax and that any tax liabilities are considered in a financial settlement.
How Blaser Mills Law can help
The Family & Divorce team at Blaser Mills Law can highlight these issues and can signpost you to experts who can provide additional support if needed.
For further information or advice please get please do not hesitate to contact Lucinda Holliday on 01494 478603 or email ljmh@blasermills.co.uk.
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