CGT Base cost divorce

[simpsonite]

Hi all,
My client bought a buy to let property with his girlfriend back in 2017.
They got married the following year and were divorced in 2022.
As part of the divorce settlement the property was transferred into his own name.
My client sold the property last month.

My logic is that base cost for my client now selling is simply the entire 2017 cost price.
This would be the case for husband and wife ( i.e no base cost uplift at time of divorce)

Could the fact they were not married at time of initial purchase have any effect to the base cost for CGT purposes?

Thanks,

[AGoodman]

The status at acquisition doesn't matter but, pre-2023, the regular no gain/no loss provision under s.58 doesn't apply if they're not living together within the tax year of the disposal.

So the transfer circa 2022 would have been no-gain / no-loss if the separation and transfer happened in the same tax year. If not, the ex-wife would have made a disposal for CGT and your client would have received her half at market value.

The old helpsheet is here:

https://www.gov.uk/government/publications/husband-and-wife-civil-partners-divorce-dissolution-and-separation-hs281-self-assessment-helpsheet/hs281-capital-gains-tax-capital-civil-partners-and-spouses-2022

If the transfer took place after 5/4/23 then the new rules are more generous and can allow no-gain / no-loss for 3 years from separation or pursuant to an order/agreement . It's worth looking at s.58 as applicable at the relevant time.

[simpsonite]

Hi A Goodman,
Thanks for your response.
Yes, it is clear that the transfer in 2022 would be nil/gain nil loss.

So my client base cost is simply the entire October 2017 purchase price with his then partner.

Thanks,
simpsonite