Last updated: 14 October 2026
Do you pay capital gains tax when selling the family home after separating?
Often not, but it depends on timing and whether you still live there. Private residence relief usually covers the gain for the time the house was your main home, plus the final 9 months of ownership. Since 6 April 2023, separating spouses and civil partners also have up to 3 tax years after the year they separate to transfer assets between them with no gain and no loss, and unlimited time if the transfer is part of a formal divorce agreement. A spouse who has moved out can also elect to keep private residence relief on a transfer to the other spouse.
Key rules since April 2023
| Rule | What it means |
| No gain/no loss window | Transfers between separated spouses are free of CGT for up to 3 tax years after the year of separation |
| Divorce agreements | Transfers under a formal agreement or court order are no gain/no loss with no time limit |
| Moved-out spouse | Can claim private residence relief when the home is transferred to the spouse who still lives there |
| Deferred sale | A spouse who keeps a share and later receives proceeds can apply the same relief they’d have had on transfer |
Selling to a third party
If the house is sold after one of you moves out:
- The spouse who still lives there gets full private residence relief
- The spouse who moved out gets relief for their period of residence, plus the final 9 months
- Any gain for the time after that is taxable at 18% or 24%, after the £3,000 annual exemption
Example
Laura and Ben separate in May 2026. Ben moves out and Laura stays in the home with their children. The house is sold in March 2028 for a gain of £120,000, split equally. Laura gets full relief. Ben owned the house for 10 years and lived there for 8 years and 3 months; with the final 9 months he’s covered for 9 years. So 1/10 of his £60,000 gain, £6,000, is taxable before his £3,000 exemption, meaning tax at 18% or 24% on £3,000.
Reporting
If CGT is due on a UK residential property, it must be reported and paid within 60 days of completion. Transfers between spouses at no gain/no loss don’t need reporting.
Other assets
The same no gain/no loss rules apply to shares, investment property and other assets transferred between separating spouses.
Unmarried couples
The special rules apply only to spouses and civil partners. Unmarried couples are taxed on transfers at market value, though private residence relief may still apply.
Practical steps
- Agree a separation date and keep evidence
- Take tax advice before agreeing a financial settlement
- Consider timing of any transfer or sale
Frequently asked questions
When does separation count?
When you stop living together permanently, or after a court order or deed of separation.
Do we need a divorce first?
No, the rules apply from separation.
What about a buy-to-let we own together?
Transfers between you may be no gain/no loss within the time limits.
Does SDLT apply to transfers between separating spouses?
Usually not, if under a divorce agreement.
Related: CGT on selling jointly owned property, CGT when selling your home and the CGT reporting deadline.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with CGT on separation and divorce. See our small business accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
