Divorce or the end of a civil partnership often involves difficult personal and financial decisions. Tax may not be the first point on the list, but it can change the real value of a settlement.
A proposed division of assets may look fair on paper. The after tax position may be different if one person receives an asset with a built in gain, moves out of the family home, takes over a property with a mortgage, receives a pension share or becomes responsible for Child Benefit.
This guide sets out the main UK tax points to consider. It does not replace legal advice, and each case depends on the facts, the timing and the wording of the financial agreement. The important point is to check the tax position before signing a settlement, rather than after the assets have moved.
The latest Office for National Statistics release reported 103,816 legal partnership dissolutions in England and Wales in 2023, made up of 102,678 divorces and 1,138 civil partnership dissolutions. Divorce rates in 2023 were 8.6 for men and 8.5 for women per 1,000 married individuals.