BREAKING UP IS HARD TO DO …
But it is a whole lot harder if you don’t get a court order afterwards to formalise the end of the relationship.
“Until recently, unmarried couples who lived together in a property which they bought together faced major tax bills if they split up or if their partner passed away,” the Sunday Independent states. “If one of the partners decided to hold on to the property by buying out the other’s share, he or she usually had to pay stamp duty on the share bought out.
“If one of the partners inherited an investment property from the other, CapitalAcquisitions Tax had to be paid. If one of the partners gave an investment property to another, the partner giving the property was usually hit with a CGT bill – even if he or she didn’t sell the property.”
Since the start of 2011, this has changed. Married people and those in civil partnerships are no longer subject to these strictures. There is a caveat, however. A person must go to court when transferring any property between them and their former partner. This is also the case for anyone in the situation where a property is jointly owned but a spouse or partner dies.
Once this is formalised by the court, a person is no longer liable for CGT, inheritance tax or stamp duty. To qualify, someone will usually have been living with their partner for five years – or two years if they have children together.