Marriage and forming a civil partnership: capital gains tax

Still on our topic of love and marriage and subsequent to the section on income tax we turn to capital gains tax. What is the impact of a formal legal union whether this is a marriage or a civil partnership on the taxpayer’s capital gains tax position?

The couple become ‘connected parties’

After the ‘wedding party’ and the ‘after-party’ the first and most important impact on the couple’s capital taxation position is that they will each become a ‘connected party’ for CGT purposes. There are a number of impacts on two taxpayers being connected parties such as having to use market value despite the true proceeds given (if any) and having losses ring-fenced or ‘blocked’ to future gains on exactly the same connected party but these are not required for married couples and civil partners who are still together.

Spouses and civil partners who...