CGT on Divorce

[George67]

Hi

I am looking for some advise please on CGT on Divorce.

My husband and I married in 1998. Divorce proceedings commenced December 2015. I moved out of the marital home in July 2016 where we have been in financial negotiations ever since. The marital home was purchased in 2013 for £1,000,025 and sold in June 2017 for £1,500,000 and we are splitting the net value equally. We also own a business as 100% joint shareholders where we are both Directors of the Company, my shares were allocated to me in 2012. I will transfer my shareholding and resign as a Director where I will receive a cash lump sum of £500,000 as we both agreed the Company value at £1m. I will also receive £25k this October and £25k Oct 2018 in lieu of pension share.

Decree Absolute has not yet been granted.

Can anyone provide any advice with regard to my CGT liability?

Many thanks in advance

[SteLacca]

Nothing to pay on your share of proceeds from the marital home as 100% private residence relief available.

You will pay CGT on the shares, but without more information we can't say how much. Is it a trading company, and has been a trading company in the 12 months ending on the date you sell your shares? If so, the disposal will probably qualify for entrepreneurs relief and CGT will be charged at 10% on the whole of the gain above the annual exemption.

If not a trading company, then 10% within the basic rate band and 20% otherwise. CGT is charged after all income tax.

Payments in lieu of pension share will be taxed differently depending on what they represent exactly. e.g. is this draw down on a pension, or simply another capital disposal?