ABSTRACT
While tax considerations should not drive the ancillary relief package regardless of all other matters to be taken into account, the important point is to achieve a workable and acceptable overall package which suits the family as a whole, and this may involve consideration of the impact of the capital taxes, particularly sales which will attract CGT. In the circumstances, close attention must usually be paid to the family’s requirements, and only then to consider the tax implications, to see if more value may be extracted than at first appeared (eg, in making use of the divorce to achieve some IHT planning), and also to see that the net effect when tax is taken into account is not radically different from what was envisaged when the package was proposed. While the family’s future is usually more important than saving a little tax, it can be foolish to throw away any benefits that may be available by arranging matters in one way rather than another. For example, where a spouse is to retire from the husband’s family company, tax advantage may be taken of giving her (and possibly the husband as well) a tax free ‘golden handshake’ which will provide both cash for her and a means for the husband to pay it.
