Taxes Consolidation Act 1997 section 1031R

Transfers of assets where relationship between cohabitants ends

Section 1031R provides that where a relationship between cohabitants ends and an asset is disposed of by one cohabitant to the other under a court order, the disposal is treated for capital gains tax purposes as giving rise to neither a gain nor a loss.

• Where a cohabitant disposes of an asset to the other cohabitant under a court order made on or after the ending of their relationship, both parties are treated as if the disposal was made for a consideration that produces no gain and no loss.
• The no gain/no loss treatment does not apply if the receiving cohabitant could not be taxed in the State on a gain arising from a subsequent disposal of the asset in the same year of assessment.
• The relief is also excluded where the asset formed part of the trading stock of the disposing cohabitant, or where the receiving cohabitant acquires it as trading stock for the purposes of a trade.
• Where the receiving cohabitant later disposes of the asset, he or she is treated as having acquired it at the time and cost at which it was originally acquired by the other cohabitant.