Divorce and GGT outside of the 12 month exemptionMake Text Bigger
My ex-wife and I are in the final stages of an amicable divorce. I am keeping the main residence, which we jointly owned together, and I am in the process of buying her out. I have already given her half of the money which she is due.
In order to complete the buyout and financial settlement, and for her to receive the second payment, I am giving her a flat I own solely in my name. The original plan was to sell this flat and then give her the money. The proposed sale arrangement, and cash transfer to her, is recorded in our financial court order which has been approved and stamped by a divorce judge.
For various reasons, mainly market conditions, I am no longer selling the property and giving her the money, instead I am transferring it to her. I have discovered that there is 12 month window for CGT exemption and I have two questions:
1) Is there anything that can be done to reduce or negate the CGT bill outside of this 12 month window? An accountant has prepared a CGT estimate, taking into full consideration rental periods and PPR etc, and I am currently looking at a CGT bill of £70,000.
2) What, exactly, determines the 12month period for exemption? Is it A) the date of the financial court order? B) The date of which we split up? C) The date at which we were finally divorced, Decree Absolut? D) none of these and something else entirely?
There is a comment on a previous 118 article below, which gives me some hope I may still qualify to make the transfer to my ex within a 12 month window and thus avoid the CGT penalty…. Any thoughts very welcome
“However tough the negotiations, decide who gets what from the property portfolio before the end of the 12-month period of grace before CGT is charged.
Don’t worry about the cash, but agree how to divvy the portfolio in principle – the date of this agreement is the trigger date for CGT, not the date when any cash changes hands.”
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