Does the transaction attract CGT or not

I have a client who is going through a divorce, this client holds in his name 2 properties, 1 residential and 1 rental property which has a trust document attached to it which I am unsure if it attracts capital gains tax or falls under transfer of ownership. The residential property was purchased I believe in the husbands name only as he could obtain a mortgage. The second property involved was originally owned by the wife before they got together but in 2013 it was transferred to the husband (with a purchase completion statement provided) so that he could obtain a mortgage on this property as the wife had bad credit history and could not get a mortgage. In 2013 there was a trust document put together where the husband was the trustee and the wife was to remain the beneficiary, while this was signed and witnessed by a solicitor the trust document I believe was never filed or submitted anywhere, not sure if it should have been. While the trust documents states the Trustee will utilize the rental income, the only part used by the trustee was to pay the mortgage monthly and all other income or tenancy/property related queries were dealt with by the wife (beneficiary). My query is in the eyes of HMRC is the husband liable for capital gains tax now this property has been transferred back to the wife?

Hi Stephanie Vincent-Squibb,
There is no Capital Gains Tax liability on the transfer of assets between husband and wife and civil partners.
Helpsheet HS281 advises ""If you and your spouse or civil partner were living together at some time in a tax year, you can transfer assets between you at no gain or loss any time up to earlier of the end of the third tax year after that in which you ceased to live together or the date on which a court grants a divorce or annulment of marriage, or dissolution or annulment of a civil partnership.
Transfers of assets between you or your spouse or civil partner in accordance with a formal divorce or separation agreement or court order will be at no gain or loss without any time limit"".
HS281 Capital Gains Tax civil partners and spouses (2024)
Thank you. 

 

Hi, Thank you for your response, however upon forwarding this to the solicitors involved it has been clarified that they couple were not legally married in the UK and only in a religious ceremony and were not registered as a civil partnership. Therefore this changes the legal status of their relationship and I am now concerned does CGT apply based on the query of the property being transferred from the original owner to the trustee in 2013 where as previously mentioned this trust was not registered anywhere and the original owner/ beneficiary was the one managing the property and dealing with tenants. This property has since been transferred back to the original owner, but as they were not married in the UK, does this now mean CGT would be payable by the owner/Trustee who has held the property since 2013 to 2024 as this is a 2nd property ? Or does the trust document indicating that the original owner is the beneficial owner mean that there is no CGT liability?

Hi Stephanie Vincent-Squibb,
As not married it is likely that capital gains will be due.
Your original question stated the trust form referred to the rental income only. you would need to contact us direct on 0300 200 3310 for a definitive answer and it is likely that evidence of the trust is required before it can be answered in full.
Thank you.