I am sorting out a divorce settlement at the moment. One of the assets 
being transferred around to balance things out is an endowment policy, 
currently solely in my (soon to be ex) wife's name.

There are two choices:

- She deeds the policy over to me, then I can pay it, freeze it or sell 
it, whatever suits at the time.

- She surrenders/sells it and gives me the cash.

It's a qualifying policy, so I think she has no CGT or other tax to pay 
if she cashes it in. However, the currently agreed plan is to just deed 
it to me, and it will take some bargaining to get her to do the work.

If she deeds it to me and I then sell it at a later date, would I then be 
liable to CGT or anything else on the proceeds? i.e. is there possibly a 
significant financial penalty to doing it that way round?

(It's more than three years since we separated, so the usual husband/wife 
gift exemptions don't apply. I know *now* we should have done it all 
sooner...)

PCPaul wrote:

> (It's more than three years since we separated, so the usual husband/wife
> gift exemptions don't apply. I know *now* we should have done it all
> sooner...)

Can't you temporarily reconcile, at least on paper, to make the exemptions
apply again?

> (It's more than three years since we separated, so the usual husband/wife
> gift exemptions don't apply.

Is that a fact? Are you saying that, even if you are still married, your 
separation will lose you the inter-spouse CGT benefit?

Who knows you are separated, anyway?

Rob Graham

On Wed, 13 Aug 2008 23:05:24 +0000, Ronald Raygun wrote:

> PCPaul wrote:
> 
>> (It's more than three years since we separated, so the usual
>> husband/wife gift exemptions don't apply. I know *now* we should have
>> done it all sooner...)
> 
> Can't you temporarily reconcile, at least on paper, to make the
> exemptions apply again?

Not after a decree nisi, I don't think they'd believe it. And anyway, CGT 
on the other bits like the transfer of half a house is covered by other 
exemptions in my case, so I don't need a get-out for that bit.

I was just wondering whether it's best to take this specific policy as 
cash or as a policy for me to cash in later.