Taxes Consolidation Act 1997 section 1031

Divorced persons: transfers of assets

Section 1031 provides that where an asset is disposed of between divorced spouses under a court order made following a decree of divorce, the disposal is treated as giving rise to no capital gains tax charge, and sets out the rules for subsequent disposals of that asset.

• A disposal of an asset between divorced spouses made under a court order following a decree of divorce is treated as made for a consideration producing neither a chargeable gain nor an allowable loss.
• The no gain/no loss treatment does not apply where the asset forms part of trading stock, either in the hands of the spouse making the disposal or the spouse receiving it.
• The relief is also denied where the receiving spouse could not be taxed in the State on a gain arising from a disposal of the asset in the year of assessment in which the acquisition occurs.
• Where the receiving spouse later disposes of the asset to someone other than the original transferring spouse, they are treated as having acquired it at the same time and for the same cost as the original spouse.