Question: How to minimise CGT on transfer of asset from husband to wife as part of divorce settlement
Facts:
10 year cohabitation (7 years of that married, no children)
Agreed end relationship May 2016, wife physically moved out August 2016 (previous 4 month separation September 2015)
Husband lives in matrimonial home (only asset) which is solely in his name, wife has registered interest in property
In mediation stages only and have had following discussion:
Husband wants to keep matrimonial home - verbally agreed to £75k as reasonable amount to transfer husband to wife
Both would prefer 2 year rule for divorce rather than either admit "bad behavior, etc."--Husband would like to back date separation into last tax year (September 2015-date of first separation) for 2 year rule to end marriage sooner.
Husband does not want to transfer £75k until there is "legally binding documentation" to prevent wife asking for more in future
Wife does not want to pay CGT and husband cannot/will not compensate wife for CGT if payment required.
Wife plans to use majority of £75k to purchase a property (yet to be found) within 6-12 months after transfer of funds.
We are fast approaching end of tax year. Settlement not exactly amicable, so is not easy to discuss. Need facts before next mediation appointment 18th Jan 2017. Are there any other options to minimise CGT besides transfer before end of this tax year? If backdate separation into last tax year, is there any way to minimise CGT? If money to be used for a property, is there a way to transfer only a portion (under CGT threshold) and the remainder placed into a trust for a property, or even paid directly to a seller on behalf of the wife without either paying CGT?
Thanks!
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