Guide

Capital Gains Tax on Divorce and Separation: the Rules Since April 2023

Written by James Whitfield · Last checked 19 October 2026 Checked against HMRC Helpsheet HS281 and the Capital Gains Manual

Quick answer

Since 6 April 2023, separating spouses and civil partners can move assets between them with no Capital Gains Tax (no gain, no loss) until the end of the third tax year after the year they stopped living together, or the day a court grants the divorce or dissolution if that comes first.¹² Transfers made under a formal divorce or separation agreement or court order have no time limit.¹ Outside those rules, a transfer is taxed as if sold at market value.¹

Key facts (2026/27)

The rules apply to disposals on or after 6 April 2023; before that, the window was only the tax year of separation.³²
Separated in 2025/26? No gain, no loss transfers can run to 5 April 2029, unless the divorce is granted first.¹
The person receiving an asset takes over its original cost, so the gain is postponed, not removed.⁴
The spouse who moves out keeps Private Residence Relief for the time they lived there and the final 9 months, and may be able to elect for more.¹⁵
After separation, each of you can have your own main home for Private Residence Relief.¹
Figures checked 19 October 2026, before the Autumn Budget on 28 October 2026. We will update this page if the Budget changes them.

What changed in April 2023?

A married couple or civil partners living together can always pass assets to each other on a no gain, no loss basis.⁴ The problem used to be separation: transfers were only protected in the tax year the couple separated, so a couple who split up in March had weeks to agree a settlement before a transfer became taxable at market value.²

For disposals on or after 6 April 2023, separating couples get up to three tax years after the year they stop living together, and unlimited time for assets that are the subject of a formal divorce agreement.³ HMRC's manual puts the end of the window at the earlier of the end of the third tax year and the day a court grants the divorce or dissolution order.²

How long is your window?

No gain, no loss window by tax year of separation

Stopped living together in 2024/25 (6 April 2024 to 5 April 2025)	To 5 April 2028, or the divorce if earlier
Stopped living together in 2025/26	To 5 April 2029, or the divorce if earlier
Stopped living together in 2026/27	To 5 April 2030, or the divorce if earlier
Transfer under a formal divorce or separation agreement or court order	No time limit

HS281's own example: a couple who separated on 1 December 2025 can make no gain, no loss transfers up to and including 5 April 2029.¹

Worked example: splitting a share portfolio

Jo and Sam stopped living together on 10 August 2025. Jo holds shares that cost £40,000 and are now worth £100,000. As part of their settlement, Jo transfers half to Sam in February 2027, before any divorce order. Jo earns over £50,270.

Jo's transfer of half the portfolio

Inside the window: Jo is treated as passing on half the cost	£20,000
Jo's gain and CGT on the transfer	£0
If the transfer fell outside the rules: market value of half	£50,000
Less half the cost	−£20,000
Less annual exempt amount	−£3,000
CGT Jo would pay: 24% × £27,000	£6,480

Inside the window Sam takes over the £20,000 cost, so if Sam later sells for £50,000 the £30,000 gain is Sam's to pay, with Sam's own allowance and rate.⁴ That embedded gain is worth weighing when you agree who gets what: £50,000 of shares with a £20,000 cost is not worth the same as £50,000 in cash.

What happens with the family home?

If you move out, you keep Private Residence Relief for the time it was your main home, plus the final 9 months of ownership.¹⁵ If you keep a share and the home is sold more than 9 months after you left, you lose full relief, and the extra time is taxable on your share.¹

HS281 sets out two ways round this for disposals since 6 April 2023:¹

An election to keep relief after moving out. You can treat the time after you left as if it were still your residence, if it is under a formal divorce or separation agreement or court order, your ex-spouse or civil partner keeps it as their only or main home until it is sold, and you have not nominated another home for that time. If you elect, you cannot get relief on any other home for the same period.
A share of the proceeds later. If you transfer your share to your ex under a formal agreement or court order but are entitled to a percentage of the proceeds when the home is eventually sold, you can apply the same tax treatment to that money as applied when you transferred your share. In HS281's example, the partner entitled to a third of the proceeds gets full relief on that third.

After separation, each of you can have your own main home for relief purposes.¹ See Private Residence Relief for how the time-based calculation works.

What about a second home or buy-to-let?

The same window applies: one of you can transfer a share of a let property to the other with no CGT inside it, and the receiver takes over the cost.¹ If you sell it instead, each owner pays CGT on their own share at 18% or 24% in 2026/27,⁶ with their own £3,000 allowance, and for UK residential property each of you files your own 60-day return. See CGT on jointly owned property for the split.

What should you check before you sign?

The date you stopped living together, which starts the clock, and the date of any final order, which can stop it early.²
Whether transfers will happen under a formal agreement or court order, which removes the time limit.¹
The original cost of each asset you are taking on, because you inherit the gain.⁴
For the home: who keeps it, whether you keep an interest, and whether the election or a share of the proceeds applies to you.¹

Couples who are still together use the same rule to share gains: see CGT between spouses and civil partners.

Frequently asked questions

What are the new CGT rules on divorce?

For disposals on or after 6 April 2023, separating spouses and civil partners can transfer assets at no gain, no loss until the end of the third tax year after the year they stopped living together, or the date the court grants the divorce or dissolution if earlier. Transfers under a formal divorce or separation agreement or court order have no time limit.

Is there CGT if I transfer a property to my ex-spouse?

Not if the transfer is inside the no gain, no loss window or made under a formal divorce or separation agreement or court order. Your ex takes over your original cost, so the gain is taxed when they sell. Outside those rules the transfer is treated as a disposal at market value.

Do I pay CGT on the family home if I moved out?

You keep Private Residence Relief for the time you lived there and the final 9 months. If the home is sold more than 9 months after you left, you can elect for the later period to count too if it is under a formal agreement or court order, your ex keeps it as their main home until the sale, and you have not nominated another home.

If proceeds from a property sale go into my spouse's account, is that their money for CGT?

No. CGT follows who owns the property, not whose account receives the money. Each owner pays on their own share of the gain. Transferring ownership of a share to a spouse you live with before the sale is a no gain, no loss transfer that can shift the gain.

When does the no gain, no loss window end if we separated in 2025/26?

On 5 April 2029, unless the court grants the divorce or dissolution before then. HMRC's own example of a couple who separated on 1 December 2025 runs to 5 April 2029.

This page is general information, not legal or tax advice. A financial settlement on divorce should be agreed with a solicitor, and a tax adviser can check the CGT before you sign.

Sources & references

The rates, allowances and rules in this guide are drawn from the official HMRC and GOV.UK sources below, checked for the 2026/27 tax year. Each link opens the relevant government page in a new tab.

Verified against published HMRC and GOV.UK guidance.