CHRISTMAS OFFER Subscribe to Hertfordshire Life today CLICK HERE

Divorce and separation

PUBLISHED: 14:06 14 January 2010 | UPDATED: 14:57 20 February 2013

Campaigners staged a protest walk

Campaigners staged a protest walk

Kelly Tevrett from Judkins Solicitors in Hertford looks at the tax implications for couples dividing their assets

WHEN a couple enters a divorce or separation they could enter into months of negotiations concerning their marriage, children and property. They may finally reach agreement regarding the appropriate division of any assets or property that they have, and believe that this will be an end to the matter, at least in so far as their finances are concerned.
However, little or no thought is given at that time to the tax consequences of their financial settlement, often leading to an unpleasant surprise when, many months later, a large tax bill arrives in the post from H M Revenue and Customs.
One of the most common potential tax consequences arising out of a matrimonial settlement is Capital Gains Tax (CGT), which can be payable if relevant property or assets are disposed of or transferred as part of the overall agreement.
Often, the main asset for most couples is the family home. If it qualifies as the Principal Private Residence of both parties for the entire period of ownership then, subject to exceptions it may be exempt from CGT liability, or may be subject to a sliding scale of liability. However, in certain scenarios, for example if one of the parties has not lived at the property for some time or has purchased another property in the meantime, there may well be a potential tax liability.
Many couples may also have invested together in second properties or holiday homes. Again, if these are sold or transferred as part of the settlement, there may also be a potential tax liability which will need to be quantified, and the potential liability borne in mind in ongoing settlement negotiations with your spouse.
Similarly, if there are other assets involved which form part of the financial agreement reached with your spouse, such as a family business or an interest in the same, this may also involve a potential tax liability, which could be considerable.
It is therefore essential to obtain legal advice both from a family lawyer who has experience of negotiating and drafting financial settlements on divorce or separation as well as separate and co existent financial advice from an accountant. Your accountant can work with your solicitor to highlight the potential tax consequences of any settlement proposed in negotiations with your spouse.
Judkins Solicitors have specialist family lawyers who can offer a professional, efficient, and confidential service dealing with all aspects of family law, including cohabitation and pre marital agreements, advice for cohabiting couples, divorce and separation, financial settlements, and children matters. Judkins have the necessary experience to liaise effectively with your accountant to ensure you get the best settlement.



0 comments

More from Hertfordshire Life

If you don’t fancy slaving over a hot fire this year, head to one of these restaurants for a festive feast on Christmas Day

Read more
15:42

The property is in the village of Benington near Stevenage

Read more
November 2018

A ready-to-move-in house is the last thing this Bishop’s Stortford couple want. Serial renovators, they’ve had the vision to take on three tired homes, including this latest project, and make them into something remarkable

Read more
November 2018
10:10

Don’t miss the December issue – everything you need for a fabulous Herts Christmas!

Read more

From Aldbury to Wheathampstead, Hertfordshire has a plethora of pretty villages. We have picked just 10 that you should visit

Read more
Friday, November 16, 2018

Inspired by steampunk and Photoshop, amateur photographer Gary Nicholls embarked on an epic challenge to create a trilogy of lavish photo novels

Read more
November 2018
Friday, November 16, 2018

250 years ago this month a baron’s servant smashed down a bedroom door in St Albans’ White Hart Inn to find a prince in bed with his master’s wife. Cue a court case, a delighted press, and much airing of royal underwear

Read more
November 2018
Friday, November 16, 2018

Christmas isn’t complete without a trip to a festive fair. From German-style food stalls to vintage fetes, Hertfordshire’s Christmas markets have it all

Read more
Wednesday, November 7, 2018

Indulge in the very best of pub classics every Wednesday night at The Black Horse.

Read more
Friday, November 2, 2018

It’s that time of year again and we have our special T-BONE steak offer!

Read more

Newsletter Sign Up

Sign up to the following newsletters:

Sign up to receive our regular email newsletter

Our Privacy Policy


Topics of Interest

Food and Drink Directory

Local Business Directory

Search For a Car In Your Area

Property Search