On separation, couples will usually have a lot of issues to deal with and details to iron out. Thinking about tax efficiency isn't likely to be anywhere near the top of that very long list ...
So, it's important, from a tax point of view, to decide when you're going to separate. If you part in late March rather than in late April, you may be subject to tax implications that aren't intended or expected.
There have been a number of representations regarding the rules for separating couples, and how much time they have to decide on their financial arrangements. The Government announced recently that for assets transferred after the 6th of April 2023, couples have three years from the date of separation to make a transfer and not be subject to Capital Gains Tax.
However, between now and the 6th of April 2023, separating couples could still be covered by the Nil Gain Nill Loss rules currently in place. Yet, couples who separated in 2021/22 and did not transfer assets in that tax year will need to wait until after the 6th of April 2023 rule change to take advantage of it. This may cause additional stress at an already difficult time.
Note that Principal Private Residence relief applies when the main residence is sold, so no Capital Gains Tax is payable on any increase in value. Remember though, a married couple can only have one main residence, even if one party leaves on separation!
Should one spouse sell the main residence after transfer by the other and gives some of the proceeds to the first spouse, these proceeds are treated as if the property was still jointly owned and no Capital Gains Tax would be due.
If you feel inspired to find out more about anything I've said here, do call me on 01908 774320 or leave a comment below and I'll be in touch as soon as I can.