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Tax help - Pensioners - Incomes over £22900 - Marriage separation
Tax helpPensioners Search Help
Marriage separation

We have a brief look here on the effect on your special allowances (such as married couple's allowance) and maintenance when you separate. We also look at how it affects capital gains and Inheritance tax.

For Income Tax purposes a married woman is treated as living with her husband (this also applies to civil partners) unless:

  • they are separated under an order of a Court, or


  • they are separated by a formal deed of separation executed under seal (except in Scotland where the deed should be witnessed), or


  • they are in fact separated in such circumstances that the separation is likely to be permanent.

Topics covered include:

Married couple's allowance

Maintenance payments

Capital Gains Tax (CGT)

Inheritance Tax (IHT)


Married couple's allowance (MCA)

  • You can get the allowance in full in the year you separate. To look at how MCA works click here.
  • If you and your spouse (or civil partner) are later reconciled the allowance is available for the tax year of reconciliation. If this is also the year of separation, the allowance is given without any break.



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Maintenance payments

  • If following separation, you or your spouse (or civil partner) are making maintenance payments to the other under a Court Order or formal agreement, the payer will be entitled to a deduction from their tax bill if either of you was born before 6 April 1935.


  • The amount taken off will be the lower of £267 or 10% of the payments made.


  • You can get the relief in full in the year of separation as well as married couple's allowance.


  • The Revenue will include the relief in your tax coding or you can claim on your tax return.


  • The relief does not apply where the maintenance is paid to or for the benefit of a child.



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Capital Gains Tax (CGT)

  • If you separate and your spouse (or civil partner) moves out of the family home, it will cease to be the main residence of the spouse (or civil partner) who leaves.


  • This means that if the property is later sold, he or she will be liable to CGT for the period when they did not live in the family home.


  • However the last 3 years of ownership of a property are always counted as years in which you lived in the house and so if the marital home is sold within 3 years from the date of leaving, there will be no CGT.


  • If the house is sold after 3 years there will be a gain but it will be based only on the excess period over the 3 years. This is then compared to the total ownership period since 31 March 1982 and that proportion of the gain is chargeable to CGT.


  • You will still have an annual exemption to set against the gain and you may have some capital losses available to set off as well.


  • The Revenue do have a special concession (ESC D6) that applies in some cases. This covers situations where the leaving spouse (or civil partner) does spend more than 3 years away from the marital home, but the property is being transferred to the ex husband or wife (or civil partner) as part of a financial settlement, and the leaving spouse (or civil partner) has not elected for any other property to become his or her main residence. If you think this applies to you, please contact the Revenue for more advice.


  • For assets other than the family home, the CGT exemption between husband and wife (or within a civil partnership) only applies for tax years when they are living together. For years following that of separation, the exemption no longer applies.

Harold - sale of family home on separation

Harold aged 77 and his wife Sandra aged 68 separated in June 2010. For the tax year 2010/11 Harold will be able to claim the married couple's allowance but not for any subsequent years.

The family home had been purchased in June 1994 and was held in Harold's name only.

Harold moved out of the family home in June 2010 and the house is sold in May 2012. As this is within 3 years of the date Harold moved out of the house, there will be no taxable capital gain.

If however the house is sold in June 2015, 3 years of the gain will be exempt and only the remaining 2 years will be treated as taxable. The total period Harold and Sandra have owned the house is 18 years. Of this only 2 years are taxable.

If the gain on the sale of the house is £99,000, the amount on which Harold is liable to CGT is:

2/18 x £99000 = £11,000

From this amount Harold can take off his annual exemption for 2015/16 and he will just pay CGT on the balance.



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Inheritance Tax (IHT)

  • When you separate there are no tax consequences for IHT; but once you are divorced, the tax-free exemption for gifts between husband and wife (and civil partners) no longer operates.


  • There is however an exemption for any gifts made by either partner for the maintenance of the ex husband or wife, ex civil partner or any children of the marriage.



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