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Divorce Finance Specialists

3 articles

Tax on Divorce

Practical guides on tax on divorce for people divorcing or separating in the UK.

  • Tax on Divorce

    CGT on divorce: the no gain no loss window, worked through

    Separating couples in the UK get three full tax years after the tax year in which they separate to transfer assets between them with no capital gains tax, and transfers made under a court order or formal divorce agreement have no time limit at all. This is the no gain no loss rule in section 58 of the Taxation of Chargeable Gains Act 1992, extended by the Finance Act 2023. The receiving spouse inherits the original base cost, so the tax is deferred rather than cancelled. Miss both routes and a transfer to your ex is taxed as a disposal at market value, with residential gains above the £3,000 annual exempt amount taxed at 18% or 24% in 2026/27 and a 60-day reporting deadline for UK residential property. This guide works through the window, the court order route, private residence relief on the family home, and two fully worked examples using 2026/27 figures.

    6 min read

  • Tax on Divorce

    Is spousal maintenance taxable? UK divorce tax rules (2026)

    In England and Wales, spousal maintenance is not taxable income for the person who receives it, and the person who pays it gets no tax relief. That has been the position for every maintenance order made after 15 March 1988, so the payer funds maintenance entirely out of income that has already been taxed, while every pound arrives in the recipient's account tax free. Child maintenance works the same way for tax, but the two are treated very differently by Universal Credit: spousal maintenance reduces a UC award pound for pound, while child maintenance is ignored completely. Pension sharing sits at the other end of the spectrum, because a pension credit received on divorce is eventually drawn as taxable pension income. Understanding these differences, and always negotiating maintenance in net rather than gross terms, can change what a settlement is really worth by thousands of pounds a year.

    5 min read

  • Tax on Divorce

    Stamp duty and divorce: exempt transfers and the 5% surcharge trap

    Transferring the family home between spouses as part of a divorce is exempt from stamp duty land tax, provided the transfer happens under a court order (including a consent order) or a formal agreement made in connection with the divorce. No SDLT is due even if a mortgage is taken over or a balancing payment changes hands, and no return is needed. The real stamp duty cost of divorce sits elsewhere: buy your next home while your name is still on the old one and the 5 percent additional dwelling surcharge applies to the whole purchase price, an extra £15,000 on a £300,000 home. You can reclaim it if your interest in the former home goes within 3 years, and a property adjustment order can protect a retained share entirely, but sequencing the settlement, the consent order and the purchase in the right order is what saves the money.

    7 min read
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