Divorce proceedings / capital gains tax

T

thewire2020

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My friend is beginning proceedings for divorce , one child age 8, a business ( in friends name ) and one family home ( in partner name)
Married 12 years, separated 2 years

Friend moved out of family home and shares custody 60/40 ( 60 to the friend)

Maintenance has stopped

Court session applied for reinstatement of maintenance , friend has issued their statement of means ( friend has 20 hours weeks job)

Friend wants to purchase a home from divorce settlement for them and child as they are currently living with a friend who has taken them in

not sure how long this process will take as the EX is threatening to not pay there was physical and verbal emotional abuse in marriage

Question came up

Will capital gains tax have to be paid assuming sale of home and business goes through ?
 
thewire2020 said:
Will capital gains tax have to be paid assuming sale of home and business goes through ?
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If it's the family home then won't it be eligible for PPR CGT relief? Full relief if it was never rented out?

Principal Private Residence (PPR) Relief

This page outlines Principal Private Residence (PPR) Relief
www.revenue.ie www.revenue.ie
What are the details of the business? I don't think that there's any relief from CGT on the sale of other assets in the context of a divorce. Perhaps if assets are transferred between spouses but that may not be relevant?

Transferring assets between spouses or civil partners

This page outlines transferring assets between spouses or civil partners
www.revenue.ie www.revenue.ie
As ever, the first port of call for such questions should be the individual's legal team. If they don't know the ins and outs of the tax issues then they can probably suggest someone who does.
thewire2020 said:
Maintenance has stopped
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From whom to whom? What sort of maintenance? Child or spousal? (The latter can qualify for tax relief in case it matters).
 
Yes its the family home never rented out small mortgage remaining
Yes they have a solicitor but the ex mentioned CGT and we just wanted to clarify
Maintenance for the child only not spousal and agreed payment was stopped 3 months ago by the father ( not court ordered)


Thank you @ClubMan
 
thewire2020 said:
Yes its the family home never rented out small mortgage remaining
Yes they have a solicitor but the ex mentioned CGT and we just wanted to clarify
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If it's the family home PPR and was never rented then I don't see how CGT would be an issue. Maybe the ex doesn't understand, is trying to sow FUD, or there's some information missing that would make CGT a genuine issue?

CGT in relation to the business may be a genuine issue but there's far too little information available here to comment meaningfully.

In my experience and knowledge it's best to try to come to some mutually agreeable arrangements through negotiation via the respective legal teams if at all possible. Depending on the court/judge to impose terms can be a lottery and they generally prefer not to have to do it themselves. But sometimes it may be the only way to get some things resolved/settled.

Your friend should primarily be guided by their legal representatives and use them as the first port of call for all questions arising.
 
Some information that may be of use...

Capital taxes following separation, divorce or dissolution

How capital taxes apply in the case of separation, divorce or dissolution, including capital gains tax, capital acquisitions tax and stamp duty.
www.citizensinformation.ie www.citizensinformation.ie

Transfer of assets and property between former partners

This page outlines the tax implications of separation, divorce and annulment
www.revenue.ie www.revenue.ie
www.cpdstore.ie

CGT Exemptions: Transfers Between Spouses, Separated Spouses, and Divorced Couples

CGT Exemptions: Transfers Between Spouses, Separated Spouses, and Divorced Couples
www.cpdstore.ie
 
It would be much easier if you referred to people as husband and wife or he and she as the story is very confusing and discourages people from trying to get their head around it.
 
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