“In my divorce settlement I received 50% of my ex-husband’s annuity gratification. It pays out in a week. Will I be taxed on it?”
Divorcing parties often do not consider tax consequences when settling divorce disputes. Failing to pay attention to the tax implications can have dire consequences, even before the ink has dried on the divorce settlement. It is important to bear in mind that your tax situation is likely to be affected if:
- there is property that is held jointly;
- a joint business or partnership from which the spouses derived an income;
- pension arrangements; or
- interest or rental income received.
Separating assets at the time of divorce can also have capital gains tax implications. It is therefore very important to obtain expert advice to be in a position to properly consider all the possible consequences of a settlement.
Let our Family Law Department and Tax Department assist you.