Divorce Tax Advice – An essential part of the process
When it comes to divorce tax advice we will help your solicitor regarding the financial aspects of the divorce. In some cases we are jointly appointed by both parties to report. The divorce process is usually controlled by a solicitor and we work with a number of local firms that specialise in divorce.
We also are qualified financial mediators, offering alternative dispute resolution (ADR), as an alternative to going to court. Again, in a divorce, we assist your solicitor in that process.
Our divorce tax advice will help separating couples to identify:
- What assets each party has and whether there are any undisclosed assets;
- What the assets are worth, especially business interest;
- How much tax would be payable if the assets were to be sold at valuation;
- How these assets are split between them;
- The liabilities they each have. For example are their tax affairs up to date;
- The levels of current income and future income that they each earn or receive; and
- The expected living costs.
We can review both parties’ tax affairs bringing tax matters up to date as necessary.
Various scenarios may be proposed for a settlement in a divorce and where a couple’s affairs are complex, each option may have different outcomes for tax. We can advise on these as discussions progress.
Sometimes one party is concerned that the other is not fully disclosing their assets and we can investigate to assess the true state of affairs.
Where there are businesses the value of the business needs to be ascertained. We carry out a share or business valuation taking into account the value of the business to the owner given that it is not likely to be sold during the course of the divorce. We would normally be jointly appointed by both parties and the court to carry out this process.
Where there is a portfolio of stocks and shares there may be unrealised gains and losses and we calculate the capital gains tax arising on the adoption of the valuation used in the settlement. We can advise on the tax and technical implications of proposed settlements and how they can be actioned out effectively.
We can advise on:
- Where one partner leaves the marital home how do we preserve the Principal private residence relief in the family home.
- The stamp duty payable and stamp duty land tax and where assets are transferred between divorcing parties.
- How to pay maintenance tax efficiently. You don’t usually get tax relief for maintenance payments to an ex-spouse.
- Transferring assets in the year of separation and the capital tax consequences.
- The tax consequences arising out of UK and offshore trusts.
- Settling trusts (for example for children of the marriage) as part of a divorce settlement.
- Dealing with businesses, homes and other assets situated abroad.
- Advising non-resident and non UK domiciled parties.
Life after divorce
We can assist with tax returns and other financial advice.