Husband leaves family home as marriage in difficulties and needs space but still comes home for breakfast and tea with kids, at weekends to enjoy family life etc (there is also another woman involved).
Current intention is to allow time to take its course and see where all parties want to be in the future. There are no current intentions to commence divorece proceedings.
Does the act of him leaving the family home mean that they only have until 5 April 07 to take advantage of nil gain/nil loss transfer exemption or does something more concrete have to take place?
What happens when one party walks out on say 31 March?
Sarah
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Live as man and wife at any time in the tax year of diposal
TCGA92/S58 applies to a disposal in any year of assessment if a legally married husband and wife are living together as man and wife at some time in a year of assessment. Assets can then be transferred between them at any time in that year of assessment at no gain/no loss.
There is more discussion on this topic in another recent thread:
https://www.accountingweb.co.uk/cgi-bin/item.cgi?id=161692, with links to relevant bitsin manuals and comment on how HMRC may view the period from when any divorce proceedings start.
It seems to me that at present they are not living together as "man and wife". If your clients want to extend the window of opportunity for tax-free disposals, it would be my view that they'd need to remain legally married and effect a reconciliation after 5-4-07 so that for a period of time in 2007-08 (a day is probably technically enough but I suspect longer would be better) they are again living in the home as man and wife.