CG65358 - Private residence relief: separation, divorce or dissolution of civil partnership: treatment of deferred payments on or after 6 April 2023

Where a spouse or civil partner ceases to reside in the matrimonial or civil partnership home on separation, divorce or dissolution of the marriage or civil partnership and transfers their interest in it to their former spouse or civil partner but then receives a share of the proceeds resulting from the later sale of the former matrimonial or civil partnership home, the gain that accrues to them at that time may qualify for private residence relief under S225BA TCGA92. Private Residence Relief will apply in the same proportion that relief applied to the original transfer to the former spouse or civil partner, or, where the original transfer qualified for the no gain or loss treatment, in the same proportion that private residence relief would have applied but for the no gain or loss treatment.    

To qualify for this treatment:

• the former matrimonial or civil partnership home must have been the spouse or civil partner’s main residence prior to the separation, divorce or dissolution of the marriage or civil partnership,
• the deferred payments must be in accordance with a deferred sale agreement or court order, and
• but for the treatment afforded by S225BA TCGA92, the deferred payment would otherwise have been treated as a capital sum derived from an asset pursuant to S22 TCGA92