What are the tax implications of a divorce?
August 2, 2022 | 40,00 EUR | answered by Robert Lehmann
Dear lawyer,
My name is Isabel Schröter and I have a question regarding the tax implications of a divorce. My husband and I have decided to get a divorce after 15 years of marriage. We have a house together that we have lived in, as well as shared savings and investments. I am now concerned about the tax consequences that a divorce could have for me.
Currently, we are both working and have our own income. How will the divorce affect our tax brackets? Will we both have to pay higher taxes if we are taxed separately? Are there any ways to take advantage of tax benefits or minimize the tax burden?
I also wonder how the division of our shared assets will affect us tax-wise. Will taxes be due on the division of the house or investments? What tax aspects need to be considered when dividing assets to avoid unexpected tax payments?
I would greatly appreciate your expertise on this matter and would like to request your assessment of the tax implications of a divorce. Thank you in advance for your help.
Sincerely,
Isabel Schröter
Dear Mrs. Schröter,
Thank you for your question regarding the tax implications of a divorce. A divorce can indeed have various tax consequences that need to be considered. I will try to answer your questions as comprehensively as possible.
Firstly, regarding tax brackets: In the event of a divorce, you and your husband will typically be taxed separately. This means that each of you will have your own tax brackets and will be taxed individually. In most cases, separate taxation may result in higher taxes being paid, as the tax brackets for singles are usually higher than the combined tax brackets for married couples. However, there are exceptions and opportunities to utilize tax benefits and minimize the tax burden.
One way to take advantage of tax benefits could be choosing the right tax bracket. Depending on your income situation, it may be advisable to choose a specific tax bracket to save on taxes. Tax benefits such as child allowances or alimony payments can also be considered to reduce the tax burden.
Regarding the division of shared assets, you should be aware that there are generally no taxes on the division of assets. However, you need to ensure that there are no tax pitfalls when dividing the house or investments. For example, there may be gift taxes applicable when transferring real estate or securities. You should also consider that tax aspects need to be taken into account when dividing pension or insurance claims.
Therefore, it is advisable to seek advice from a tax expert in the event of a divorce to avoid unexpected tax payments and to optimize the tax implications of a divorce.
I hope this information is helpful and I am available for further questions.
Best regards,
Robert Lehmann
