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DIVORCE OR SEPARATION, AND YOUR HOME


June 2023 Blog-compressed
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Divorce, Separation, Home, Asset
Divorce, Separation, Home, Asset

1. Getting a financial agreement

When you divorce or end a civil partnership you and your ex-partner need to agree how to separate your finances.

This includes deciding how you’re going to divide:

  • pensions

  • property

  • savings

  • investments

You might get things like:

  • a share of your your partner’s pension - including State Pension or private pension plans

  • regular maintenance payments to help with children or living expenses

You can usually avoid going to court hearings if you agree how to split your money and

property.

The rules are different if you were not married or in a civil partnership. You’ll still have to agree on child maintenance payments for any children.

It is different in Scotland and Northern Ireland.

Making an agreement legally binding

If you and your ex-partner agree on how to divide money and property, you need to apply for a consent order to make it legally binding.

Get help agreeing...

You can use a mediator or get other help to resolve issues out of court.

Get the court to decide

If you cannot agree on everything, you can ask a court to make a financial order.

2. If you agree

It’s usually more straightforward and less expensive if you agree how to divide your money and property. Get help agreeing.

Making your agreement legally binding...

To make your agreement legally binding you need to draft a consent order and ask a court to approve it.

If your agreement is not legally binding, a court cannot enforce it if there are any issues later.

A consent order is a legal document that confirms your agreement. It explains how you’re going to divide up assets like:

  • pensions

  • property

  • savings

  • investments

It can also include arrangements for maintenance payments, including child maintenance.

You can get legal advice or you can ask a solicitor or divorce specialist to draft a consent order for you.

When to apply for a consent order...

You’ll usually need to wait until you have your conditional order or decree nisi before asking the court to approve your consent order.

It is usually more straightforward to divide money and property before you apply for the final legal document to end the relationship.

The final legal document is the:

  • final order or decree absolute if you’re getting a divorce

  • final order if you’re ending a civil partnership

You can divide money and property after your divorce is finalised or civil partnership has ended. This may change what you’re entitled to get and you may have to pay tax on it.

How to ask the court for approval...

You and your ex-partner have to:

  • draft a consent order

  • sign the draft consent order - you also need 2 photocopies of the signed original

  • fill in a statement of information form

One of you also needs to fill in a notice of an application for a financial order.

If you’re ending a civil partnership or legally separating, send the signed forms and copies with the £53 fee to the courtdealing with your paperwork. Keep your own copies.

If you’re divorcing, send the signed forms and copies with the £53 fee to:

HMCTS Financial Remedy, PO Box 12746, Harlow CM20 9QZ

You may be able to get help with court fees if you’re on benefits or a low income.

There’s usually no court hearing. A judge will approve your consent order to make it legally binding if they think it’s fair.

If they do not think it’s fair, they can ask you to change it.

How much it costs

The court fee is £53.

Legal advisor fees vary depending on their experience and location.

A mediator can help you and your ex-partner agree on how to split money and property, without taking sides.

Mediation is not relationship counselling. It can help you agree on how you’ll divide your assets, including:

  • pensions

  • property

  • savings

  • investments

3. Get help agreeing

The mediator can decide mediation is not right for you (for example, if there’s been domestic abuse and you need to go to court instead).

How much it costs?

A MIAM is usually about £120. If you need more mediation sessions they cost more and fees vary depending on where you live.

Making your agreement legally binding

At the end of mediation you’ll get a document showing what you agreed. This agreement is not legally binding.

If you want a legally binding agreement you need to draft a consent order and get a court to approve it. The consent order can be based on what you agreed in mediation.

If you need more help agreeing...

You can:

  • ask a legal adviser about other ways to resolve issues out of court (such as family arbitration or collaborative law)

  • get information and advice from Citizens Advice

  • read guidance to help you sort out finances when you get divorced

  • work out your finances with a divorce and separation calculator

If you do not agree on everything...

You can ask a court to decide on anything you have not agreed on.

4. Get the court to decide

If you and your ex-partner cannot agree how to divide your finances you can ask a court to make a financial order (also known as the ‘contested’ route or an ‘ancillary relief order’).

This means the court will decide how assets will be split. Getting the court to decide usually takes longer and is more expensive than if you and your ex-partner agree.

You must attend a meeting about mediation before you can apply to the court to decide - except in certain cases (if there’s been domestic abuse, for example).

A financial order will describe how you’re going to divide up assets like:

  • pensions

  • property

  • savings

  • investments

It can also include arrangements for maintenance payments, including child maintenance.

When to apply for a financial order

You’ll usually need to wait until you have your conditional order or decree nisi before asking the court to make a financial order.

It is usually more straightforward to divide money and property before you apply for the final legal document to end the relationship.

The final legal document is the:

  • final order or decree absolute if you’re getting a divorce

  • final order if you’re ending a civil partnership

You can divide money and property after your divorce is finalised or civil partnership has ended but it may change what you’re entitled to get and you may have to pay tax on it.

How to apply...

Send 2 copies of the form to the court dealing with paperwork in your area to divorce or end your civil partnership. Keep a copy for yourself.

You can hire a legal advisor to help you apply for a financial order from the court.

After you apply

There are three stages:

  • the first appointment - a short hearing with the judge to discuss your application

  • financial dispute resolution (FDR) appointment - to help you agree without needing a final hearing (you might need more than one appointment)

  • final hearing - if you’re not able to agree, this is when a judge will decide how you must separate your finances

The court will send you and your ex-partner details when the first appointment will be. This is usually 12 to 14 weeks after you apply.

Before the first appointment

You and your ex-partner need to fill in a financial statement for a financial order (Form E) to show a breakdown of your property and debts. This includes giving an estimate of your future living costs.

You’ll also need to collect documents about your finances, for example:

  • rental or mortgage agreements

  • pension documents

  • loan agreements

  • proof of your salary income, for example P60 or recent pay slips

  • details of personal belongings worth more than £500, for example a car or house contents

How long it takes...

It depends on:

  • how many financial dispute resolution appointments you need

  • if you need a final hearing

There can be several months between the appointments.

How the court decides

If you cannot agree, a judge will decide how assets will be split. They’ll base their decision on how long you’ve been married or in a civil partnership, as well as your:

  • age

  • ability to earn

  • property and money

  • living expenses

  • standard of living

  • financial needs and responsibilities

  • role in looking after the family, for example if you were the main earner or caring for the family or home

  • disability or health condition, if you have any

The judge will decide on the fairest way to divide the assets if there’s enough to meet everyone’s needs. They will make arrangements for any children first - especially their housing arrangements and child maintenance. The reason for the divorce or dissolution is not taken into account.

The judge will usually try to arrange a ‘clean break’, so everything is shared out, and you no longer have any financial ties to one another.

How much it costs...

The court fee is £275.

Legal advisor fees vary depending on their experience and where you live. How much you pay in total depends on how many financial dispute resolution appointments you need and if there will be a final hearing.

You can get legal aid to help with court costs in certain situations, for example if you’re separating from an abusive partner.

Further help and advice

You can:

  • get information and advice from Citizens Advice

  • read guidance to help you sort out finances when you get divorced

  • find out more about how to apply for a financial order

5. Maintenance payments

The court sometimes tells the person with the higher income to make regular maintenance payments to help with the other person’s living costs.

This is called a ‘maintenance order’.

A maintenance payment can be set for:

  • a limited period of time

  • until one of you dies, marries or enters into a new civil partnership

The payment can also be changed if one of you loses your job or gets much better paid work.

Child maintenance

The court can also decide on child maintenance, but this is often arranged by the Child Maintenance Service.

6. Tax when transferring assets

You do not usually have to pay Capital Gains Tax if you give, or otherwise ‘dispose of’, assets to your husband, wife or civil partner before you finalise the divorce or civil partnership.

Assets include shares, certain personal possessions and property. You usually do not have to pay tax if you transfer or sell your main home.

If you transfer an asset when you’re separated

If you lived together at any point in the tax year that you transferred the asset, the normal rules for spouses and civil partners apply.

Otherwise you may have to pay Capital Gains Tax. You’ll need to get a valuation of the asset on the date of transfer, and use it to work out the gain or loss.

The tax year is from 6 April to 5 April the following year.

If you transfer an asset after you’ve divorced or ended your civil partnership

You may have to pay Capital Gains Tax on assets you transfer after your relationship has legally ended.

The rules for working out your gain or loss are complex. Contact HM Revenue and Customs (HMRC) or get professional tax help, such as an accountant or tax adviser. You’ll need to tell them the date of:

  • the final order or decree absolute if you’re divorced

  • the final order if you have ended a civil partnership

  • any court order, if assets were transferred this way

  • any other contract showing the transfer of assets


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