Tax On Divorce Settlement

Divorce Tax Implications

One question many couples that are ending their marriage and entering divorce proceedings may be, “do you pay tax on divorce settlements?”

The answer to that question is that it depends on your situation and what assets are going to be exchanged as part of the divorce settlement.

We work with couples together or individuals. We also work with family law solicitors that are helping their clients during a divorce settlement.

Divorce settlement Tax consultation & report

You may be getting a divorce but are unsure what tax implications exist. You can book a call now with our divorce tax consultations that can also write you a report for your solicitors to agree on the final settlements.

60 minute tax consultation + divorce tax report

Book here

 

Divorce and tax

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Capital Gains Tax during a divorce settlement

Many types of assets are subject to Capital Gains Tax if sold to your spouse or a third party. Timing is critical to avoid paying tax that can be avoided during the divorce settlement

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Stamp Duty Land Tax during a divorce settlement

Stamp Duty Land Tax (SDLT) is a property purchase tax. There is also a 3% SDLT higher rate that may be a large sun of money that can be avoided during a divorce settlement.

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Income Tax

Getting a divorce and income tax is not something most people will think about. However, a transfer of certain assets could trigger an income tax liability without you knowing it.

How to avoid Capital Gains Tax when getting a divorce.

Our divorce tax advisors can help you the Capital Gains Tax planning and mitigation when getting a divorce when assets are transferred in a divorce settlement.

Once our capital gains tax advisors work with you to understand what assets are being transferred in a divorce a settlement. The divorce tax advisors help you understand the amount of Capital Gains Tax that can be legally reduced through our practical, workable solutions.
Certain assets will attract Capital Gains Tax and investments that will not. It is essential to understand asset classes and what Capital Gains Tax liabilities may exist.

Capital Gains Tax may be mitigated if assets are transferred before the spouse leaves home or the final settlement of divorce takes place.

Tax on divorce

0% CGT
Plan ahead

Capital Gains Tax may be avoided altogether with the right amount of tax planning with our divorce tax accountants and tax advisors.

28% CGT
Not planning ahead

Capital Gains Tax may be paid on certain assets. It is essential to agree on the transfer of assets that bring about the least amount of tax. Failing to plan could reduce 28% of your assets, in tax.

Stamp Duty Land Tax & divorce settlements

There are many Stamp Duty Land Tax exemptions available during a divorce settlement. Stamp Duty Land Tax is not something that a couple think about when ending their marriage. There are far more critical things to consider.

That said, tax is a burden that can add fuel to an already emotional event. That is why you must understand what assets are being transferred during a divorce settlement and purchased once the divorce is finalised. We must not forget the 3% higher Stamp Duty Land Tax rate that may also apply in certain circumstances.

Stamp duty Land Tax may not need to be paid during divorce, but it may need to be paid on buying future homes or buy to let property investments. This tax may be mitigated with some effective tax planning with one of our divorce tax accountants working alongside your family law solicitor.

Divorce settlement Tax consultation & report

You may be getting a divorce but are unsure what tax implications exist. You can book a call now with our divorce tax consultations that can also write you a report for your solicitors to agree on the final settlements.

60 minute tax consultation + divorce tax report

Book here

How our divorce tax advisors can help you

It is one thing to be informed about tax. It is another to be tax-efficient, legally compliant and get the result that both parties want.

We work with couples together or individuals. We also work with family law solicitors that are helping their clients during a divorce settlement.

 

Process of working with our divorce tax accountants and tax advisors

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Book a tax call with our qualified divorce tax advisors

Book a tax call with our divorce tax advisors, upload as much information about your plans, and list the questions you want to be answered. Our tax consultations are recorded so that you can listen back at any time.

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Divorce tax plan and calculations

We will document the suggested assets being transferred from one spouse to another and review the tax liabilities to be reduced/mitigated. These reports take about two days to finalise

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Email support

We provide aftercare email support once the divorce tax report has been issued. We ensure that our email answers are sent to you within two working days.

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