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Where there is no court approval

Last updated 3 March 2016

If you and your spouse divide your property by some means other than by a court order or an agreement approved by the court, normal CGT rules apply – not the rules explained in this chapter. You must include on your tax return for that year any capital gain or capital loss you make on the transfer of a CGT asset.

The spouse to whom the asset is transferred is taken to have acquired the asset at the time of transfer.

Special rules may apply if the amount paid by one spouse for property owned by the other is greater or less than the market value of the property and they are not dealing at arm's length – see market value substitution rule for capital proceeds and market value substitution rule for cost base and reduced cost base in the Explanation of terms. In these cases, for CGT purposes, they are taken to have paid or received the market value of the property.