Does Living With a New Partner Affect a Divorce Financial Settlement?
Concerns about the impact of living with a new partner and how it will impact your divorce financial settlement are not unusual. As divorce solicitors, we help answer your questions on how your planned cohabitation with a new partner or your ex-spouse’s decision to spend a large proportion of their week with their new partner will affect the divorce financial settlement.
For expert advice on divorce and family law call our team of specialist divorce lawyers or complete our online enquiry form.
Does forming a new relationship affect the divorce financial settlement?
Forming a new relationship may affect your divorce financial settlement. It isn’t possible for divorce solicitors to give a definitive answer without more information about your personal and financial circumstances and those of your ex-spouse.
Although it is commonly assumed that the presence of a ‘’third party’’ will make a massive difference to a financial settlement that isn’t necessarily correct. That’s why it is best to speak to a divorce solicitor about your situation, and that of your ex-spouse, and to make sure that you don’t let the presence of a new partner adversely affect your judgment. If you do then it can be harder to set your feelings and emotions aside to focus on reaching a reasonable split of the family assets.
It is especially hard to come to terms with an ex-spouse meeting a new partner when the ex-partner has hidden the new relationship from you and you have found out about the new boyfriend or girlfriend through the backdoor. For example, from children, family friends, or, as is often the case, from posts and pictures on social media or from disclosure and questions within financial settlement court proceedings.
Is your ex-spouse cohabiting with a new partner?
If there is a new partner on the scene the first question, from a family law solicitors’ point of view, is whether the spouse is living with his or her new partner or if they are at an early stage of a new relationship and not cohabiting. Sometimes there are disputes about whether a couple are living together or not because:
Of the financial consequences of cohabiting and
The ex-spouse and their new partner are not living together on a full-time basis as they each keep a separate home base although they spend a lot of their week together and present as a couple
Working out if an ex-spouse is cohabiting with a new partner is important because if cohabitation can be established:
Your ex-spouse may find it a lot more difficult to ask for spousal maintenance for themselves
If there is already a financial court order in place you may be able to apply back to the family court to stop the spousal maintenance or to reduce the amount you pay
If you are negotiating a divorce financial settlement, or you are involved in court proceedings, your ex-spouse may find it harder to argue that they need the same amount of money to rehouse themselves
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Proving that your ex-spouse is cohabiting with a new partner
It is not uncommon for there to be a dispute about whether an ex-spouse and their new partner are living together as a cohabiting couple.
Whether you are negotiating a divorce financial settlement by agreement or involved in divorce financial settlement court proceedings you and your ex-spouse are both under an obligation to provide full and frank financial disclosure. This includes disclosing your relationship status and the impact of your relationship on your housing and outgoings. For example, if you are living with a new partner are they sharing the rent and other outgoings? For example, if you plan to buy a new house with your partner does their savings and earnings capacity affect your ability to secure a bigger mortgage?
Financial disclosure and new relationships
The requirement to provide information about new relationships is contained in the court document (called a Form E) that needs to be completed by both a husband and wife in divorce financial settlement proceedings. Most family law solicitors also ask you to complete a Form E if you are negotiating a divorce financial settlement.
In addition to disclosing the existence of a new partner that you are living with (or plan to do so), you also need to provide details about the new partner’s financial circumstances. This requirement can be a cause for concern especially if a new relationship is in its early stages or a new partner is unwilling to provide information that may be used against them or may result in them being drawn further into acrimonious divorce financial settlement proceedings.
Non-disclosure of relevant personal matters or financial non-disclosure could be a basis for setting aside a financial agreement or a financial court order. If the non-disclosure is discovered during negotiations then trust can be lost making it harder to reach a divorce financial settlement. If the non-disclosure is revealed through questions asked during financial court proceedings the judge could draw adverse inferences against the person who hasn’t provided full and frank disclosure.
The relevance of a new relationship to a divorce financial settlement
There is often an argument that two homes are being maintained by the spouse and the new partner. It is then a case of establishing if, despite the two physical homes, the couple is in reality cohabiting because of the amount of time spent together and the financial links between the two of them.
In some situations, it can be in the financial interests of a spouse to say that they do have a new partner they are living with and have taken on financial responsibility for. That is because that may mean they have larger outgoings and therefore an argument to say that they can’t afford to pay as much spousal maintenance each month or they need to spend more on rehousing.
It is important to take objective family law legal advice on the relevance of an ex-spouse forming a new relationship when sorting out the financial division of property and assets. That’s because a lot of emotional and financial time and energy can be spent on exploring whether a separated spouse is in a new relationship and then whether, in reality, they are cohabiting together.
The job of a family finance solicitor is to quickly assess whether a new relationship will have an impact on the financial settlement or the financial court proceedings. Although a new partner can be a hot topic it can either be a red herring or one of the key factors in your negotiations or in the family court deciding how money and assets are divided. The relevance of a new partner all depends on individual family financial and personal circumstances.
For expert advice on divorce and family law call our team of specialist divorce lawyers or complete our online enquiry form.
Robin Charrot
Feb 07, 2023
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6 minute read
In a Divorce Do You Keep Property You Owned Before Marriage?
The ONS figures reveal that the average age at marriage for men is around 38 years and 35 years for women. These statistics continue the rise in the average age of marriage since the 1970s. Marriage in the under the 20s has fallen whilst marriage for the over 65s has risen sharply.
With those figures, it isn’t surprising that family lawyers are increasingly finding that arguments in divorce financial settlements centre on whether a husband or wife should keep their property owned before marriage in the divorce financial settlement or if the assets should be shared.
In this article, family law solicitor, Robin Charrot, discusses how the divorce court treats pre-marriage assets.
For expert divorce and family lawyers call our team of specialist divorce lawyers or complete our online enquiry form.
What is a pre-marriage asset?
A pre-marriage asset is anything owned by a husband or wife before their marriage. Whilst a couple could have bought an asset together, disputes in divorce financial settlement proceedings focus on assets bought by a husband or wife in their sole name before the date of their marriage.
A pre-marriage asset can be anything of value as family solicitors warn that it is not worth arguing over the relevance of pre-marriage owned assets if their value will be outweighed by the additional costs of a longer financial settlement court hearing or the investigative costs of tracing and valuing the asset.
Typically, pre-marriage asset disputes relate to:
Property – this could be a property bought by one party to the marriage that has become the family home or a buy-to-let property or second home
Family business – if a husband or wife set up a family business or inherited shares in the business before their marriage
Investments- this could be a share portfolio, cash savings, or cryptocurrency
Pension – the pension could be a final salary scheme pension that was started pre-marriage with a current or former employer, a private pension scheme, or a business-related pension scheme
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Do pre-marriage assets need to be disclosed in divorce financial settlement negotiations or court proceedings?
Pre-marriage assets need to be disclosed in divorce financial settlement negotiations and court proceedings. That’s the case whether you are engaged in:
Direct discussions
Family solicitor negotiations
Family mediation
Family arbitration
Divorce financial settlement court proceedings with an agreed financial consent order or where a financial court order is made after a contested hearing
The law says you need to provide full and frank financial disclosure of all your assets. If an asset was bought before your marriage, you should disclose it but you can argue that the value of the asset should be ignored when negotiating a divorce financial settlement or in contested financial court proceedings.
If you do not disclose the existence of a pre-marriage-owned asset and the court finds out about the asset the court can draw inferences about the honesty of the spouse who concealed the property. If the existence of the pre-marriage asset comes to light after a financial court order is made then your ex-husband or ex-wife could ask the court to reopen a financial court order made without disclosure of the asset, involving additional time and expense.
Do pre-marriage assets need to be valued in divorce financial settlement proceedings?
The court decides if assets need to be valued in divorce financial settlement court proceedings and will normally order a valuation by a jointly appointed independent expert. The fact that the court has ordered the valuation of a pre-marriage-owned asset doesn’t mean the court will decide that the value of the asset is taken into account when making a financial court order. The court often says it needs to know the total value of all assets owned before it can decide if pre-marriage assets are relevant or should be shared as part of the divorce financial settlement.
Are pre-marriage assets ignored if you sign a prenuptial agreement?
Divorce lawyers advise that the best way to protect pre-marriage-owned assets is to sign a prenuptial agreement to ringfence the assets. If you didn’t sign a prenup, then signing a postnuptial agreement is another option.
Prenuptial agreements can either be comprehensive in scope or the agreement can say that a particular asset should be ignored (or ring-fenced) in a divorce financial settlement. Whether the pre-marriage asset will be ignored depends on the circumstances in which the prenuptial agreement was signed and other factors. For example, was financial disclosure provided as part of the prenuptial agreement discussions, were you coerced into signing the agreement, did you both take independent legal advice, and was the agreement signed at least 28 days before the marriage?
If you meet all the tests for a prenuptial agreement to be found to be binding on both spouses, the pre-marriage asset can still be taken into account if a fair divorce financial settlement cannot be made without recourse to the property because the reasonable needs of the husband and wife can't be met without taking into account the value of the disputed asset.
Take the case of a 40-year-old man who owned property before his marriage. The property became the family home when he married and he subsequently had 3 children with his wife. The couple doesn’t have any other significant assets and if the value of the family home isn’t taken into account in the divorce financial settlement the wife will end up with very little and will be unable to rehouse herself and the children. The outcome might be very different in a short marriage without children and where the wife had a good income and mortgage capacity.
How does the court decide if pre-marriage-owned assets should be kept by the asset owner?
In divorce financial settlement proceedings, the court makes a financial court order after assessing a range of statutory factors (referred to by family law solicitors as the ‘’section 25 factors’’) and exercising discretion.
The court will ask itself a series of questions:
Is the asset a pre-marriage asset- there may be a dispute over the date of purchase or, if the couple were cohabiting at the time of purchase, it could be argued that the cohabitation (assuming the relationship moved seamlessly into marriage) means the asset wasn’t acquired ‘’pre-marriage’’
Is there a prenuptial agreement and does the agreement meet all the relevant tests, such as the agreement was freely entered into, without coercion?
What are the reasonable needs of any children and the husband and wife?
What factors are relevant to the pre-marriage assets? For example, the length of the marriage or the fact that the pre-marriage asset was used as the family home for years may make it less likely that the asset owner can argue that the value of their pre-marriage asset should be ignored
What are the family assets and can a fair and reasonable financial settlement be ordered without recourse to the pre-marriage-owned asset?
A family solicitor will ask the same sorts of questions to help you and your spouse reach a divorce financial settlement involving pre-marriage-owned assets to try to avoid a contested divorce financial settlement hearing.
For expert advice on divorce and family law call our team of specialist divorce lawyers or complete our online enquiry form.
Robin Charrot
Jan 20, 2023
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7 minute read
Divorce and Tax
When it comes to divorce you don’t immediately think of tax. After all it is reasonable to assume that separation and divorce should be one aspect of your life that is tax free. However, our Manchester divorce solicitors will tell you that divorce isn’t tax free. In this blog we look at divorce and tax.
Taxing divorce
When it comes to separation and divorce there are obvious and hidden tax consequences. For example:
Child support – the parent that pays child support for the children will pay the child support out of their net income and the parent who receives the child support won't pay income tax on the child support. It is important to factor in the net effect of child support payments when looking at issues such as mortgage capacity and affordability of mortgage payments or the likelihood of the court ordering spousal maintenance in addition to child support
Spousal maintenance – if the court orders that spousal maintenance is payable then the spouse paying the spousal maintenance will pay it out of their net income and the spouse receiving the money won't pay income tax on the spousal maintenance. If the receiving spouse did then it would be double taxation
Pensions - if a couple agree to the making of a pension sharing order then it is important to look at the tax consequences of taking the cash out of the pension fund, if that is the plan. If the tax effects of withdrawing the money from the pension aren’t considered then one or both spouses may end up with a far smaller financial settlement than envisaged or paying too much tax than they would have done if they had taken expert financial and pension advice
The family home – if the family home is going to be sold then it is important to factor in stamp duty costs on rehousing when looking at the housing needs of the husband and wife. If the family home is going to be retained in both spouses names until a future date then capital gains tax may be payable by one spouse when the property is eventually sold, for example, when the youngest child is age 18
The sale or transfer of assets – if assets such as shares in a family business or an investment portfolio are sold or transferred then capital gains tax may be payable. There is the potential to avoid payment of capital gains tax if the transfer of assets takes place in the tax year of separation. That is why it is best to take early specialist legal and financial advice if you are a business owner getting divorced or you have other assets that may be liable to capital gains tax on sale or transfer, such as a buy to let property portfolio
International tax- if a couple own property abroad, such as a second home, then there may be significant tax issues in the overseas country if the property is sold or transferred
Tax issues on divorce – if a spouse makes allegations in financial court proceedings that their husband or wife has not declared income for tax purposes (and there is evidence to support this) or evidence of other tax irregularities (such as a sham trust) a family judge can order disclosure of the judgement to HMRC.
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Divorce, tax and HMRC
It is accurate to say that some divorce and financial court proceedings can open up ‘’a can of worms’’ for a husband or wife when it comes to their tax affairs.
In a recent court case a judge said that the £12 million divorce financial court proceedings could potentially end up in a HMRC investigation, subject to the findings at the final hearing of the financial settlement case.
The case concerns a shipping business and a family home worth an estimated £4.5 million. The couple enjoyed a luxurious standard of living during their marriage but when the relationship broke down there was an acrimonious separation that led to financial court proceedings initiated by the wife.
A court of appeal judge, Lord Justice Males, warned that should the wife establish her case against the husband then both could both be implicated in a 'criminal conspiracy...to evade tax properly due' on their earnings. The judge’s comments were made when the court heard an appeal to reinstate a freezing order injunction to prevent the husband from disposing of assets that the wife says are family assets and the husband says aren’t beneficially owned by him. The husband disputes ownership or any wrongdoing asserting that the multi-million shipping fleet were legitimately and properly transferred and thus there was no tax evasion and the ships or their value can't form part of the financial settlement.
The court of appeal judge was clear that he made no findings but was equally transparent in saying that if a court at the final hearing of the financial settlement case concluded that the ships were not genuinely transferred to a third party this could potentially result in investigations by tax authorities.
Divorce, tax and legal advice
When it comes to divorce and tax, specialist Whitefield divorce solicitors work with expert accountants and financial advisors so that a divorcing husband and wife know where they stand both legally and financially and can make informed financial settlement decisions, understanding the tax implications of their divorce and financial settlement.
Our Manchester Divorce Solicitors
Whitefield, North Manchester and Holmes Chapel, Cheshire Evolve Family Law divorce experts cover all aspects of family law, divorce and financial settlements. To speak to a specialist Whitefield divorce solicitor call us or complete our online enquiry form. Appointments are available face to face, via video conferencing, Skype or by telephone appointment.
Robin Charrot
Jan 19, 2023
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5 minute read
Divorce and Inheritance
For many young couples it is a real struggle to get on the property ladder. The combination of rising house prices and stagnate salaries has made the ambition of property ownership an uphill battle for the majority of young married couples. However, many of their parents are sitting on wealth tied up in large family homes. At some distant point, there may be a large inheritance.
When you are getting divorced one of the stumbling blocks to reaching an agreed divorce financial settlement can be when either a husband or wife has received an inheritance or is likely to receive a substantial legacy in the future.
Family solicitor, Robin Charrot, looks at the topic of divorce and inheritance and offers advice on how the court sorts out divorce financial settlements involving inheritances.
For expert advice on divorce and family law call our team of specialist divorce lawyers or complete our online enquiry form.
Protecting inheritance from divorce
There are ways to protect an inheritance from divorce if you have not already received an inheritance. Examples include:
Signing a prenuptial agreement – a prenuptial agreement only works if you are engaged and have not yet got married
Signing a postnuptial agreement – the agreement can ringfence the inheritance or can be comprehensive and set out your agreed divorce financial settlement in the event of a separation. A postnuptial agreement only works if there are safeguards in place to protect both husband and wife, such as financial disclosure and the taking of independent legal advice
The creation of a discretionary trust – this is only effective if you have not yet received your inheritance and requires specialist private client and estate planning advice
Keeping an inheritance separate – if you have received an inheritance then one way of trying to keep it out of any future divorce financial settlement is to not share the money. This does not always work as it will depend on the extent of your other assets, the length of your marriage, and several other factors. Keeping the inheritance separate means retaining the money in a sole account and not putting it into a joint account or using it to pay off the mortgage on the family home or to invest in the family business. The court may decide to treat a non-shared inheritance as a non-marital asset. This means that the court will not share the inheritance as part of the divorce financial settlement unless it is necessary to do so because otherwise needs cannot be met
Family law solicitors recognise that keeping an inheritance separate may conflict with financial advice or tax advice. For example, financially it may be best to pay off the mortgage on the family home rather than keep your inheritance in an account or in investments in your sole name. Alternatively, from a tax point of view, it may be best to make use of your ISA allowance and the ISA allowance of your husband or wife. The legal and financial and tax advice is all correct but it looks at the issue from different angles. Professional help can then assist you to work out the option that best suits your needs and priorities.
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Inheritance and divorce financial settlement financial disclosure
In divorce financial settlement negotiations and court proceedings, there is often an assumption that inherited money or inheritance and trust prospects do not need to be disclosed to your spouse or to the court. They normally do as you are required to provide full and frank financial disclosure.
If you do not disclose an inheritance this can result in:
Your spouse is suspicious about other financial aspects, such as the value of the family business or the extent of your income, so it makes it less likely that you can reach an agreed divorce financial settlement
In divorce financial proceedings the court is asked to make inferences about your honesty and about whether you have other assets because you did not initially disclose the existence of an inheritance or a trust
If a financial court order is made and it subsequently comes to light that you received an inheritance or were a discretionary beneficiary of a trust your spouse can ask the court to review the order and make a new one based on the argument that the court would not have made the original order if you had disclosed the existence of the inheritance or the trust
Family solicitors recommend that if you have received an inheritance or if you are named in a Will or a trust you discuss your financial disclosure with a specialist divorce financial settlement solicitor before you start financial settlement negotiations, attend family mediation, or complete Form E financial disclosure as part of the divorce financial settlement court process.
Even if the advice is that you must disclose the inheritance you can still argue that the inheritance should not be considered in the divorce financial settlement. For example, because you have not received the legacy yet and the testator may change their Will or because although the inheritance has been received the inherited money did not become marital property because of the existence of a prenuptial agreement or as a result of the money being kept separate.
Many future inheritances can be safely ignored and will be disregarded by the court. For example, if you are getting divorced in your 20s and your parents have named you as a beneficiary of their Wills but they are in their 60s and fit and healthy. Why? Firstly, you may not inherit for another 30 or 40 years, and secondly, by the date of their death, they may have spent your legacy or decided to leave it to a charity. The situation may be different if you and your spouse are in your 60s and you are divorcing after 30 years of marriage and there is an imminent inheritance and not enough equity in the family home to rehouse you both or to meet your retirement needs. The inheritance could mean your spouse gets more of the equity or pension share than would have been the case if you were not due to imminently receive a substantial inheritance or had recently received it.
Divorce and inheritance can be a very emotional topic as invariably people want to protect an inheritance because of their strong belief that the inheritance was family money left to them and that their relative would not want their estate shared with their ex-husband or wife. Divorce financial settlement solicitors and estate planning lawyers can guide you and your family on your options.
For expert advice on divorce and family law call our team of specialist divorce lawyers or complete our online enquiry form.
Robin Charrot
Nov 23, 2022
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6 minute read
Moving Abroad with a Child After Divorce
Many parents who are thinking about a separation or divorce want to make a fresh start overseas with their child.
In this article, specialist family law solicitor Louise Halford shares her experience in helping parents apply to move abroad with their children and advising parents on how best to oppose child relocation applications.
For expert Divorce and Children Law advice call our team of specialist divorce lawyers or complete our online enquiry form.
Moving overseas with a child after separation or divorce
Evolve Family Law has seen an increase in inquiries from parents about moving out of the UK with their children. The inquiries are not just from parents currently based in Cheshire and the North West of England, but from across the UK.
The increase in children law inquiries is down to the following trends:
The world becoming a smaller place with people meeting and marrying partners from other countries
The number of overseas families who came to the UK on work visas and dependant visas and who settle in the UK by securing indefinite leave to remain or British citizenship but, after a separation or divorce, one parent wants to return to their country of origin
Emigrating for work as opportunities for working abroad increase
International parenting after separation or divorce
It is said that being a parent is one of the hardest jobs in the world. That is particularly true for any parent who is involved in ‘international parenting’ as a result of one parent moving abroad with the child. Most parents find it hard enough to let their child go off for the weekend with their ex-partner, let alone accept that their child should get on a plane to another country to see their mum or dad.
Prior to committing emotionally or financially to an overseas move, many parents don’t fully appreciate that if they are successful in relocating abroad with their child that the family court will often order that the child should spend long chunks of time during holidays with the parent who is not moving abroad and who will be missing their weekend contact.
It is often said that there are ‘no winners, only losers’ when one parent moves to another country with their child, whether that be back to a parent’s country of origin or as a result of a new job or relationship. However, with communication and imaginative contact arrangements, even airport handovers, can work. If it is a relocation to Spain then the flight from Manchester or Liverpool airport and the child’s handover may be a lot easier than navigating a motorway trip from Cheshire to Cornwall or Guildford.
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The law on international child relocation
Some parents are well-researched on the law on child relocation but for others, it is a whole new arena. The basic principle is that if a child is habitually resident in the UK the child can’t move abroad with either parent unless the other parent agrees to the move or the family court makes an order granting permission to relocate.
The law on child relocation and moving abroad with your child can be hard for a parent to get to grips with. If, for example, both parents originate from the US but currently live in the UK with their children this may mean that their children are classed as habitually resident in the UK. Therefore, although all the family members are American citizens, if one parent wants to return ‘home’ to the US with the children, permission still has to be obtained from an English court. Without specialist legal advice on child relocation law, many parents don’t realise the implications of booking their flight home. The legal and personal costs of not knowing the law on international parenting can have a devastating impact on a parent and their chances of successfully getting a court order to let them take their child abroad or a child arrangement order.
Contact arrangements if a child moves overseas
As part of one parent agreeing to give permission, or the court making an order allowing the other parent to relocate, the contact arrangements should be recorded. If a court order to relocate is made the court will normally also make a child arrangements order setting out how often the child should see the other parent. The court order can include written contact, Skype, and face-to-face contact. An agreement should be reached and recorded on specific details such as
The agreed travel arrangements
Who, if anyone, will accompany the child
Who should pay for the costs of flights
Extended family and grandparent’s ability to travel, time differences with Skype, the child’s ‘best friend’, and key dates such as Thanksgiving and grandad’s 80th birthday should not be forgotten. ‘Small’ details such as these can impact on whether arrangements work for a child. Compromise is also a key factor as if grandparents can’t make a long-haul flight to Australia for Christmas could both parents split the travel and meet in Dubai? It is often those small points that make all the difference in whether international parenting will work for a family or not.
Legal advice on child relocation overseas
It is always tough to answer a query on whether a mum or dad will get permission to move abroad. That is not just because the law on this subject is so complex but also down to international parenting being one of the hardest things for any parent to contemplate, and therefore for their family law solicitor, to guide a parent through. Invariably a parent is already emotionally, if not financially, committed to their move abroad before they take the step of getting advice and so it is always worth getting an assessment of your family situation and your options before you commit to a move.
For expert Divorce and Children Law advice call our team of specialist divorce lawyers or complete our online enquiry form.
Louise Halford
Nov 07, 2022
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5 minute read
Changes to Capital Gains Tax on Divorce
Tax is not normally something that is on your mind when you are thinking about a separation or divorce but divorce solicitors say that capital gains tax has to be considered when negotiating a divorce financial settlement.
The government has announced changes to the way capital gains tax is calculated on separation or divorce. In this article, divorce financial settlement solicitor, Robin Charrot, looks at the planned changes and explains the importance of checking out tax on divorce before you agree to your divorce financial settlement.
For expert Divorce and Financial Settlement advice call our team of specialist divorce lawyers or complete our online enquiry form.
Tax on divorce
Many people who decide to separate do not realise that the timing of their separation, or their decision to transfer assets to the other spouse or to sell assets, can create tax implications. That is why it is important that a divorce financial settlement solicitor checks any proposed financial agreement to both reality test the financial settlement and to check the net effect of the financial deal. Without legal input, what you think is an equal split may not be a 50:50 division of assets if one spouse is going to end up paying a large tax bill in the future, whilst the other spouse escapes from tax liability. The financial agreement may still be a fair financial settlement but both husband and wife must understand the net effect so they are both comfortable with the deal or can negotiate a financial settlement that does achieve equality if that is their objective.
The current tax rules on separation and divorce
Under the current tax rules, a husband and wife can transfer assets between one another without the transfer is taxable. That’s because the transfer of an asset takes place on a no gain and a no loss basis so the spouse acquiring the asset gets the item at the base cost of the spouse who is transferring the asset to them. In other words, a spouse transfer does not crystalise a gain or loss. The issue with the current tax rules for separating couples is that these capital gains tax rules only give these concessions in the tax year of separation.
That may not sound like a big problem but it is. Take the example of a couple with an investment portfolio or a buy-to-rent property. They may conclude that if the wife is to stay in the family home, then the fair financial settlement is for the wife to transfer her share of the investments or buy to let property to the husband. If the couple decides to split in late March they only have until the end of the tax year in early April to sort out the transfers. If they don’t then one of them could face an unexpected and large capital gains tax bill that they would be solely responsible for.
Even if a couple decides to separate in May (so they have almost a full tax year) they can get caught out if they do not take early legal or accountancy advice. For example, the couple could start no-fault divorce proceedings in June but not start thinking about their divorce financial settlement until many months later giving them insufficient time to give notice to transfer investments or to sort out a new mortgage on the buy-to-rent property before the end of the tax year of separation.
The government has acknowledged that tight timeframes on various tax aspects arising from separation or divorce can create difficulties and complexities so the proposed new tax regime is more generous and less restrictive.
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The changes to tax on divorce or separation
With effect from the 6 April 2023, there will be a new tax regime for separating or divorcing couples. If you transfer assets between spouses on or after the 6 April 2023 the no loss and no gain principle will apply to transfers that take place up to 3 years after the end of the tax year of separation. Furthermore, if the transfer takes place as part of a financial court order there is no time limit for the no loss and no gain principle.
The changes to tax on divorce or separation and the family home
If you sell or transfer a family home as a married couple there is no capital gains tax payable because of principal private residence relief. However, principal private residence can be lost resulting in unexpected tax bills.
The complexities of capital gains tax mean you both need to think carefully through the ramifications of agreeing to a mesher order on the family home. For example, a husband and wife may agree that the family home should stay in joint names until their youngest child is 18 as the spouse staying in the family home can't afford to take out a mortgage in their sole name so cannot get the house transferred to them. In reaching this type of mesher agreement the spouse who leaves the family home can, in some circumstances, lose their principal private residence relief.
The government is planning to make it simpler for couples to agree to mesher orders because the non-occupying husband or wife's share of the property will not be subject to CGT when the family home is eventually sold under the terms of the mesher order. The proposed changes may make mesher-type orders more attractive to some families, especially where there isn’t enough equity to rehouse two families or there is a particular need to delay selling the family home until the children have completed their exams.
Capital gains tax and divorce in the future
Even after the new rules come into force capital gains tax will still be payable in some scenarios when a couple separates or divorces. If you are concerned about reaching a divorce financial settlement and the tax implications it is best to get early specialist advice on your family law options.
For expert Divorce and Financial Settlement advice call our team of specialist divorce lawyers or complete our online enquiry form
Robin Charrot
Sep 15, 2022
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6 minute read
What Can I Do About Emotional Abuse in my Marriage?
Emotional abuse is one of those tricky topics. Many people don’t like to admit that they are being emotionally abused because it makes them feel weak or because they don’t know what to do about it.
In this blog, our Northwest divorce solicitors look at what you can do about emotional abuse in your marriage.
Call Evolve Family Law or complete our online enquiry form.
What is emotional abuse?
It is difficult to define emotional abuse because, unlike physical violence, there is no unmistakable slap mark, bruise or fracture. The effects of emotional abuse are often not obvious, but they are equally damaging as physical abuse.
Emotional abuse is all about control through the manipulation of your emotions. It isn’t a one-off experience but is usually a slow and invidious process until it gets to the stage where you haven’t got the strength to leave the relationship. Sometimes it takes something as dramatic as seeing your partner start to abuse your child emotionally, that is the ‘’wake-up call’’ to get help.
Emotional abuse isn’t about having rows, shouting at one another, or saying words you regret. We all do that in relationships, especially if we are under pressure because we are worried about work and financial matters. Emotional abuse is best described by example, as it can be subtle. Examples of emotional abuse and controlling behaviour include:
Constantly belittling you by telling you that you are a fool, ‘’incapable of doing that’ ’and judging your efforts.
Giving directions on what you should wear, how much you should eat, when you should speak, who you should see and if you can go out.
If you challenge the behaviour, telling you that you are insane and that no one will believe you if you speak out.
Refusing to speak to you or leaving the family home for days if you ask them to change their behaviour.
Taking over control of almost every aspect of your life, from money management and access to funds to making all the critical decisions about the children and to making the decisions for you, from who you vote for to your choice of hairstyle.
Restricting you so you cannot speak on the phone to friends and family, as your phone and internet activity is monitored, and your movements are tracked.
Sometimes those in emotionally abusive relationships also experience physical violence. Many say that physical violence is easier to cope with than the constant emotional abuse or living with a partner who is silent and won’t speak for days because you have committed some minor misdemeanour.
Emotional abusers can temper their abuse with gifts and kind words, thus giving you hope that they have changed or that they can’t help their behaviour because they love you so much. This type of abuse is so subtle and powerful that people from all walks of life can find themselves caught up in an abusive relationship and not know how to get out.
Family law solicitors say it is important to reflect on your partner’s behaviour and consider if it is emotional abuse. Whilst it is best not to make a rapid decision to separate, it is equally sensible to look at whether what you are experiencing is emotional abuse and to ask yourself if there is any prospect of your partner or spouse recognising their behaviour as abusive and doing something to change their behaviour.
Sadly, for many husbands, wives, and partners, emotional abuse can become part of their daily life, so they become inured to it. Often, it is when their partner’s behaviour has turned on the children that the behaviour is seen for what it is: emotional abuse.
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What help can you get if you are in an emotionally abusive relationship?
Many people think that they can’t ask for help because what they are experiencing isn’t ‘’domestic violence’’ or that ‘’no one will believe me’’ or that ‘’I can’t afford to leave’’. None of those statements is true.
An experienced and understanding family law solicitor will talk you through your options. Importantly, they won’t try to control your decisions or tell you what you must do. However, they can guide you and support you, whether you decide to stay with your partner or decide that a separation or divorce is the best option for you and your family.
Many divorce and family law solicitors work with professional counsellors and therapists who can offer:
Joint sessions for you and your partner to see if the problems within your relationship can be addressed, or
Individual help to an emotional abuser to get them to accept their behaviour for what it is, or
Individual help for you to help you recover your self-esteem and confidence after years in an emotionally abusive relationship.
Help from a family law solicitor if you are in an emotionally abusive relationship
A family solicitor can help you with:
Advice on a temporary separation, including whether you should stay in the family home and financial matters such as spousal maintenance, child support and short-term parenting arrangements and contact (child arrangements order).
A long-term separation or divorce with help ranging from a separation agreement to divorce proceedings, child custody and contact and a financial settlement.
Court orders to protect you, such as an occupation order so you can stay in the family home or a non-molestation order.
The divorce solicitors at Evolve Family Law
Whether you need legal help with an emotionally abusive relationship, a separation, divorce, maintenance, an injunction, financial settlement, or a children order, the specialist but friendly and supportive team of family lawyers at Evolve Family Law can help you.
Call Evolve Family Law or complete our online enquiry form.
Our latest blogs
Louise Halford
Aug 08, 2022
·
5 minute read
What is Divorce Coaching?
When you're getting divorced you can come across a lot of legal jargon and terms you’re not familiar with. Many people feel embarrassed about asking their divorce solicitor questions ( they shouldn’t) but in this blog our divorce solicitors explain what a divorce coach is and how they can work with your divorce solicitor to help you.
For divorce advice call our team of specialist divorce lawyers or complete our online enquiry form.
What is divorce coaching?
Divorce coaching gives you the chance to think and make decisions about your separation or divorce as well as process your feelings in an impartial and non-judgemental setting. It allows you to express and work through all the fears, thoughts, and anxieties that you may not feel ready to talk to those around you about. It can help you navigate the divorce process, empowering you to make decisions and take the action that’s right for you.
It can also allow you to explore how you would like this next chapter of your life to be post-divorce, helping you to see the possibilities and feel confident, positive, and optimistic about the future.
Why do I need a divorce coach if I have a divorce solicitor?
You may have a great divorce solicitor that you trust and feel comfortable talking to but a divorce lawyer is there to give you legal advice and explain your legal options. However good their legal advice is and however supportive they are you can still feel overwhelmed by the decisions you have to make. For example, over the timing of your divorce proceedings, whether you should agree a proposed financial settlement or the proposed post separation parenting arrangements for your children.
A divorce coach works with you so you have more confidence in the divorce, financial and children decisions you are making. With greater confidence you are likely to be better able to either reach compromises or cope with the stress of financial or children law proceedings that may be necessary. For example, if your ex-spouse is refusing financial disclosure or your ex is refusing you contact with the children.
Working with a divorce coach
A divorce coach has a client-centric point of view and works with you, not you and your partner. Coaching sessions are one to one and are confidential. They are usually conducted either at the private office of the coach, or via a platform such as Zoom.
You are your own expert on your life and what is most important to you as you move forward. A divorce coach though can act as a thinking partner and sounding board for you, helping you to make sure you can communicate what you want clearly, whether that is to your ex, your family, your divorce solicitor or your family mediator.
A divorce coach helps you to explore your views about possible options, enabling you to consider different choices. In this self-discovery process you can sometimes discover that there are gaps in your knowledge or gaps in your skills. Together you and your coach can develop a plan on how to close these gaps so that you can be confident not only in the decisions and agreements you are making as part of your divorce. But also, beyond it to help you to build strong foundations for a life post-divorce filled with optimism, potential, security, and excitement.
What are the benefits of talking to a divorce coach?
There are many benefits of divorce coaching, such as:
Reducing feelings of turmoil - getting divorced requires a lot of paperwork and organization — tasks that can feel overwhelming when you’re going through emotional turmoil. A divorce coach help you make sure you have everything you need to get it done so that when you meet with your divorce solicitor you are ready and prepared, meaning your meetings can be as cost effective as possible.
Saving you money - working with a divorce coach during your divorce can actually save you money by ensuring that your meetings with your divorce solicitor focus purely on the legal process and decisions that need to be made. It is completely understandable that you want to talk through how you are feeling and work through all your emotions about your divorce. But doing this every time you meet with your divorce solicitor may increase your legal fees without actually moving you forward emotionally. A divorce coach will help you manage your emotions so that you can make decisions that are not clouded by how you are feeling about your ex-partner.
What will a divorce coach talk to me about?
The following isn't an exhaustive list, but does give you a general overview of the sorts of things a coach can work with you on:
You're so fearful about your future that you can't make decisions
You are feeling overwhelmed by all the paperwork getting divorced involves
You have no idea what you're going to do when the divorce is final
You're very angry and are trying to use your children to get revenge
You're not familiar with the legal process and feel overwhelmed
You're not thinking clearly and it's making it very hard to make any decisions
You are struggling to figure out a parenting plan that's going to work
You are struggling to figure out how you will co-parent
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What should I look for in a divorce coach?
When looking for a divorce coach your divorce solicitor will be able to help with a referral but you should be checking that any divorce coach you approach is:
Properly qualified with a recognised qualification in coaching
A member of a recognised coaching body such as the Association for Coaching, or the International Coaching Federation. This confirms that they are committed to working ethically and responsibly with you and are appropriately qualified
A good fit for you as coaching is a very personal experience and it’s important that you feel comfortable with your divorce coach and that you can work well together. So, check that any coach you contact offers a chance to have a free, no obligation 15- 30 minute consultation with them so that you can ensure they are the right person for you
Final thoughts on divorce coaching
Divorce can be a lonely, stressful, and unsettling time, having a coach to help you navigate through, be on your team and ultimately help you flourish after your divorce is complete is definitely something worth considering.
For divorce advice call our team of specialist divorce lawyers or complete our online enquiry form.
Robin Charrot
May 19, 2022
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6 minute read
No-Fault Divorce
Divorce solicitors have campaigned for years for divorce law reform and it is finally happening. Whilst that is great news, in this article we take a look at what the reforms mean and whether you should wait to apply for a no-fault divorce and the potential benefits of not waiting when you can apply for a divorce now.
For expert Divorce, Children and Financial Settlement advice call our team of specialist divorce lawyers or complete our online enquiry form.
In this article, divorce and financial settlement solicitor, Robin Charrot answers your questions on your divorce options and the importance of getting the timing of your divorce right.
Your divorce questions answered on:
What is no-fault divorce?
When is divorce law changing?
Can you get a no-fault divorce now?
Do the ground for your divorce matter?
Should you wait for divorce law change or divorce now?
What is no-fault divorce?
No-fault divorce is when you get a divorce without having to blame your husband or wife for the marriage breakdown in the divorce petition.
It is possible to get a no-fault divorce now, but no-fault divorce will become the norm when the law changes.
Even if you do not have the grounds to get a no-fault divorce now, you may be able to divorce amicably and quickly without having to wait for the no-fault divorce law to come into force.
The timing of your divorce can have long term financial and other implications for you, so it is best to talk to a divorce solicitor about when to start divorce proceedings.
When is divorce law changing?
The Divorce, Dissolution and Separation Act 2020 reforms divorce law in England and Wales with the introduction of no-fault divorce.
Couples will be able to apply for a no-fault divorce under the new law from the 6th April 2022.
However, if you don’t want to wait for the change in divorce law, you may be able to get a no-fault divorce now or get divorced amicably.
Can you get a no-fault divorce now?
Under current divorce law you have to file a petition for divorce that says your marriage has irretrievably broken down and cite one of five facts. Two of those facts can give you a no-fault divorce now. They are:
Separation for two years or more and your husband or wife agrees to a divorce or
Separation for five years or more, in which case you don’t need your husband or wife's consent to the divorce.
There are three points to make about divorce based on separation:
You do not need to have lived in a separate house to your husband or wife for the two or five years provided that you have lived separate and apart in the same household. A divorce solicitor can explain what this means and if this fits with your circumstances.
Even if you have not been separated for long enough to get a divorce using the current divorce law on separation, you can still reach an agreement about your future divorce by signing a separation agreement and parenting plan. This will make things easier for you when you do start divorce. proceedings and you can start to implement your financial settlement now. For example, by arranging for the family home to go on the market for sale or starting the ball rolling with getting the house and mortgage transferred from joint names to one name.
If you have not been separated for long enough to get a divorce using the current law on separation and divorce, you can probably still get an amicable divorce without having to go to court to get your decree absolute.
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Do the grounds for your divorce matter?
If you want to get divorced now, and you have not been separated from your husband or wife for at least two years, you can still start divorce proceedings now if your marriage has irretrievably broken down and your husband or wife has:
Committed adultery or
Behaved unreasonably or
Deserted you.
There are six points to make about ‘fault divorce’:
You do not need to name a third party in the divorce proceedings based on adultery.
A divorce on one of these three reasons takes the same time for the divorce court to process the divorce as a divorce based on separation.
Divorce solicitors can normally agree the allegations of unreasonable behaviour so they don’t cause upset to your husband or wife.
You will not have to go to a court hearing for your divorce if your husband or wife agrees to the divorce.
The fact that you have started divorce proceedings using adultery or unreasonable behaviour or desertion will not affect the financial settlement or the children arrangements.
There may be reasons why it is best, in your circumstances, to get divorced now rather than wait. A divorce solicitor can explore why it may be better for you to get divorced straight away rather than wait until after the 6 April 2022.
Should you wait for divorce law change or divorce now?
There are many reasons why it may be in your best interests to start divorce proceedings now rather than wait. Every family situation is different so speak to a divorce solicitor about what is best for you in your individual circumstances.
Some reasons why it may be best to start divorce proceedings now are:
Emotionally you can't wait and you want to get on with your divorce.
Your husband or wife doesn’t mind unreasonable behaviour or adultery divorce proceedings being started as they know the divorce petition is a ‘means to an end’ and they can't see a reason to wait.
Your children feel as if they are in limbo or think that you and your spouse will get back together as you are not getting divorced straight away.
Your husband or wife won't agree to the sale of the family home or other assets and you can only apply for a financial court order if there is a divorce petition filed at court.
You want to remarry as soon as possible because you are expecting a child with your new partner or your new partner is in poor health.
The tax consequences of divorce and financial settlements mean that in your financial circumstances it is better not to wait until the new tax year.
You are in an abusive relationship.
You are in need of urgent financial support and spousal maintenance as your husband or wife won't pay towards the mortgage or household bills.
You fear child abduction or have other urgent children law related worries.
You think that you husband or wife will sell or transfer assets to their family or friends to try to reduce your financial settlement by continuing to hide assets or syphon money.
You are concerned that your husband or wife could start divorce proceedings in another country and the financial settlement that you would receive from a court in the other country would not be fair or meet your needs. There are special considerations if your family has overseas connections and you need international divorce
You are worried about the consequences of delay as your husband or wife is running up debts and you fear they may be made the subject of a bankruptcy petition.
You husband or wife is due to get their cash free lump sum pension payment and you are concerned that they will not preserve the money so you won't get a fair financial settlement. There are special considerations for divorce in retirement.
There are many other reasons why you may want to divorce now. Our divorce solicitors will talk to you about your family and financial circumstances and work out which approach is best for you.
For expert Divorce, Children and Financial Settlement advice call our team of specialist divorce lawyers or complete our online enquiry form.
Robin Charrot
Mar 10, 2022
·
7 minute read
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