Married Couples Print
Both husband and wife are each entitled to the CGT annual exemption.
Disposals of assets from one spouse to the other are treated as being made on a no gain/no loss basis. In practice this means that in most cases the donee spouse acquires the asset at a value equivalent to the cost to the donor.
It should be noted that the above relief only applies to spouses living together, and in the case of a separation, the relief only extends to the end of the fiscal year during which the separation occurs. This is irrespective of the date of separation, so in some instances the relief may be lost shortly after the separation takes place. Thereafter, the transfer of assets prior to the divorce becoming absolute are likely to be treated as transfers between connected persons and the consideration for the assets would be taken as the open market value for CGT purposes. After the divorce becomes absolute, the consideration received for the assets would be the amount on which the gains are based, as the individuals would no longer be treated as connected persons. However, where the disposal is not at arm’s length, then the disposal is deemed to have taken place at market value, and the market value of the assets will be taken to be the disposal proceeds for CGT purposes.