Tax implications of relationship breakdown

Produced in partnership with David Salter
Practice notes

Tax implications of relationship breakdown

Produced in partnership with David Salter

Practice notes
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This Practice Note sets out the tax implications to be considered on relationship breakdown, ie separation, Divorce or Dissolution, including income tax, Capital gains tax, Stamp duty land tax and inheritance tax. Specialist advice should be sought where necessary.

As there are no specific tax consequences to the relationship between unmarried couples or those who have not formed a civil partnership, so there are no special tax rules relating to their relationship breaking down. There is, however, a general rule for capital gains tax (CGT) that transactions not at arm's length must be recalculated as having been at market value—a transaction between an unmarried/non-civil partnership couple living together may well be treated as not having been at arm's length.

For married couples and civil partners, the main tax provisions relating to spouses/civil partners cease to apply when the relationship has broken down, rather than by reference to the date of the conditional order or final order. For inheritance tax (IHT) purposes, the date of the final order is relevant.

Note that divorce, dissolution or separation does not

David Salter
David Salter

Solicitor (non-practising)


David Salter has enjoyed a varied career in family law with over 45 years’ experience. He served as National Head of Family Law at Addleshaw Goddard and, subsequently, as Joint National Head of Family Law at Mills & Reeve, retiring in 2018.

From 1997-1999, David was Chairman of Resolution, also acting as the first Chairman of Resolution’s Accreditation Committee. He subsequently became President of the International Academy of Family Lawyers from 2010 to 2012, having previously served as the Academy's European Chapter President.

He has sat in various part-time judicial posts since 1985 sitting regularly as a deputy High Court judge and Recorder in the Family Court until March 2022. He now conducts private financial dispute resolution appointments.

David was one of the original members of the Family Procedure Rules Committee which framed the 2010 Rules, serving a ten-year term from 2004 to 2014.

He is a prolific author on a variety of family topics with an acknowledged expertise in relation to pensions on divorce. He is a contributor to the Family Court Practice (The Red Book), Butterworths Family Law Service, Rayden and Jackson, the International Family Law Practice and LexisPSL Family. 

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Jurisdiction(s):
United Kingdom
Key definition:
Divorce definition
What does Divorce mean?

The bringing to an end of a valid marriage between a man and a woman

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