Divorce

Changes to Capital Gains Tax on Divorce

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. [related_posts] 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   ·   6 minute read
A beautiful wife investigating her husband about hiding money.

My Ex is Hiding Assets in Divorce Proceedings

Do you suspect your ex is hiding assets from you in your divorce proceedings? If your ex is hiding assets there is a real risk you won't achieve a fair financial settlement. If you suspect your ex is hiding assets there is also a strong possibility that you won't be able to reach an agreed financial settlement because of your suspicions. That’s why if you think your ex is hiding assets in divorce proceedings it is best to get expert family law advice on your options. For expert Divorce and Financial Settlement advice call our team of specialist divorce lawyers or complete our online enquiry form. Is my ex hiding assets in divorce proceedings? Divorce solicitors will tell you that a husband and wife are under a duty to provide full and frank financial disclosure of their assets when negotiating a financial settlement. That’s the case whether you are negotiating through: Direct discussions Solicitor negotiations Family mediation Family arbitration Financial Court proceedings If things are amicable, or your finances are straight forward, you may not want to see reams of paperwork going back years but every family situation is different. You probably know if your ex has hidden stuff from you throughout your marriage or you may suspect that they started to do so when they met someone else or when the marriage got into difficulties and the relationship started to drift apart. If your ex is very keen to reach a financial settlement without providing any paperwork and wants to get an agreed clean break Financial Court Order as soon as possible this may raise a red flag for you or your divorce solicitor as you need some minimum paperwork to check things out. If you feel that you are being pressurised into accepting no or very limited financial disclosure documents, and into accepting your ex’s word for everything, talk to a financial settlement solicitor before agreeing to a division of assets. That’s because whilst your ex might be totally honest and just wanting to ‘cut to the chase’ and get an agreement, you are entitled to see supporting paperwork. It’s important to do so as any financial settlement you reach by agreement can't easily and quickly be unravelled if it turns out that you were right to have your suspicions about your ex hiding assets from you. [related_posts] Why is my ex hiding assets? There are many reasons why an ex may try to hide assets. Divorce solicitors come across these common excuses: It is inherited money It is savings from my income The new house is owned by my new partner so it isn’t really my asset even though the deposit came from me There is no need to get a business or pension or other asset valued as you can take my word for the value Money was owed to a family member and was not transferred to them to hide assets Cash that was put into additional bank accounts was forgotten Property owned abroad or owned before marriage doesn’t count towards the financial settlement so wasn’t disclosed as it isn’t relevant ( in the ex’s opinion) These are all excuses and should not be used as a reason to not provide full and frank financial disclosure. Sometimes an ex will try to hide money that might not be relevant to the financial settlement but you will both spend time and money arguing over the financial disclosure. However, if the asset had been disclosed at the outset your financial settlement solicitor could have advised you about its overall relevance to the financial settlement. For example, a pension accrued before a short marriage with a cash equivalent transfer value of £10,000 may not be of significance and your ex is wasting their time and money by trying to hide an asset that may be of limited relevance because of the duration of your marriage or your ages. However, by failing to disclose the pension, you and the Court may be far more sceptical about how honest their other financial disclosure is, such as, the extent of your ex’s declared self-employed income or the reason they have transferred money to a sibling or new partner. What can you do about an ex hiding assets? If you are separated or getting divorced and you believe your ex is hiding assets you may need urgent financial settlement and injunction representation. That’s because if your ex is hiding assets with the intention of reducing your financial settlement you may need an injunction order to stop them. Examples of when you may require a financial injunction include: Your ex is transferring money or property to a third party Your ex is putting their pension in payment and taking the maximum tax free cash sum to put the money out of your reach Your ex is syphoning money out of the family business by paying a family member for false invoices with a view to making sure the family business has a lower value placed on it as profits will be down Your ex is buying property overseas or transferring assets abroad Your ex is moving money out of joint bank accounts and putting it into cryptocurrency An injunction is a temporary measure to stop your ex from hiding or disposing of assets. It is best to consider a section 37 injunction application rather than assume that in financial settlement Court proceedings a new partner, parent or sibling can be joined into the financial application to try to unravel the transfer of assets. Whilst that is possible it is normally best to stop the transfer taking place in the first place by securing a freezing injunction. If you have not already done so, a divorce solicitor will also advise you to start financial Court proceedings for a Financial  Court Order. Within the financial settlement application, the Court can make financial disclosure orders that your ex will need to comply with. If your ex does not comply with the financial disclosure orders then you can ask the Court to enforce the disclosure orders against your ex or ask the Court to draw inferences. For example, if the Court ordered disclosure of historical bank statements to reveal what happened to the £100,000 after the sale of a buy to let property and your ex flouts the disclosure order you can ask the Court to draw inferences as to why and ask the Court to add back in the £100,000 so you get a greater share of the other family assets. Financial proceedings and ex hiding assets If you have started financial proceedings and you are not satisfied with your ex’s Form E financial disclosure then a specialist family solicitor can review the financial disclosure with you and draw up a list of additional questions and request for extra non-standard paperwork . For example, if your ex is the director and shareholder in a family business and you suspect they have been syphoning money off to their new partner by creative accounting or use of the director loan account, you can ask for a forensic accountant to value the business and look at your accounting concerns as well as asking for an order that your ex disclose statements for their DLA. Alternatively, you can ask the Court to make financial disclosure orders to help you investigate if: Your ex is self-employed and the family lifestyle does not match their declared earnings Your ex has withdrawn significant sums from a business or personal account and that is not their usual pattern of spending Your ex previously mentioned an asset that they said would be a rainy day asset or pension but there is no mention of the asset in their financial disclosure There are lots of ways a tenacious divorce solicitor can ‘get to the bottom’ of financial disclosure, with the assistance of your background information and knowledge of your ex, combined with seeking the right injunction, financial disclosure orders and valuations. For expert Divorce and Financial Settlement advice call our team of specialist divorce lawyers or complete our online enquiry form
Robin Charrot
Jun 23, 2022   ·   7 minute read
Smiling woman talking with divorce coach

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 [related_posts] 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   ·   6 minute read
Worried young woman sitting on sofa at home and ignoring her partner who is sitting next to her

A Guide to No-Fault Divorce

A look at all you need to know about no-fault divorce Divorce law is changing. It is a big deal to divorce solicitors as they are interested in divorce law but, if you are thinking about a  divorce, you don’t want to know all about the old divorce law, the rationale for divorce reform, and the interesting quirks in the new divorce legislation. You just want to know if you can get divorced and, just as importantly, if you can get custody or contact with the children and what will happen to the house and other assets. For expert Divorce, Children and Financial Settlement advice call our team of specialist divorce lawyers or complete our online enquiry form. At Evolve Family Law, our divorce solicitors believe in keeping things simple, so divorce and financial settlement solicitor, Robin Charrot, provides a quick guide to no-fault divorce. Your divorce questions answered on: What is no-fault divorce? What are the grounds for a no-fault divorce? Who can apply for a no-fault divorce? The no-fault divorce Court process How long does a no-fault divorce take? No-fault divorce and child custody and contact No-fault divorce and financial settlements What is no-fault divorce? No-fault divorce is the name for the new divorce law. As you can probably guess from the name, fault has been removed from divorce proceedings so you can no longer start divorce proceedings based on your husband or wife's adultery or unreasonable behaviour. What are the grounds for a no-fault divorce? To apply for a no-fault divorce, you need to file a divorce application and state that your marriage has irretrievably broken down. You do not need to say why and you don’t need to have been separated for a specified period. As the grounds are simplified it is no longer possible to contest or oppose a divorce other than in very unusual circumstances. Who can apply for a no-fault divorce? With a no-fault divorce application, you have three options: You and your spouse can apply jointly for a no-fault divorce or You can apply on your own for the divorce or Your husband or wife can make the divorce application Whether you apply jointly or individually, it is a similar divorce process. If you apply together you are referred to as applicant one and applicant two. If you make the application, you will be the applicant and your husband or wife will be the respondent. From a divorce solicitor perspective, we would probably prefer you to either make the application jointly or to make the application yourself, just so you are in control of the divorce process and so that it does not get stalled if you want to get your no-fault divorce as quickly as possible. [related_posts] The no-fault divorce Court process The no-fault divorce process consists of four steps: You apply for a divorce – this could be a joint application or an application made by one of you. The applicant confirms they want to go ahead with the divorce. The Court makes a conditional Order – this used to be called the decree nisi of divorce. After a wait of six weeks, the applicant can apply for the final Order – this used to be called the decree absolute of divorce. In between steps one and two there needs to be a twenty week wait. That period can't be shortened as it is part of the new no-fault divorce law. How long does a no-fault divorce take? Divorce solicitors say no-fault divorces will take about six months from start of the divorce proceedings to final divorce Order but the timescales could be a bit longer if there are delays between the four stages. For example, because you want extra time to reflect or because you don’t want to progress the divorce proceedings over the Christmas period. A no-fault divorce is therefore not a quickie divorce but it does have advantages. For example, as there is no need to blame your husband or wife for the marriage breakdown, a no-fault divorce may reduce acrimony and help you reach an agreement on child custody and contact or the financial settlement. No-fault divorce and child custody and contact In a no-fault divorce, the Court is not asked to decide on the residence and contact arrangements for your children after your divorce. Ideally you will be able to agree the parenting arrangements either direct, through help from family law solicitors, or in family mediation. If you can't do so then either you or your husband or wife can make a separate application for a child arrangement Order. This Order will say if the care of the children is shared and will specify the residence and contact arrangements. If you are concerned about child abduction or you want to move overseas with your children after your divorce then you can apply to Court for a prohibited steps Order or relocation Order. No-fault divorce and financial settlements In a no-fault divorce the Court is not asked to decide who gets what assets in a financial settlement unless either you or your husband or wife ask the Court to do so. If you are able to reach a financial settlement by agreement you can jointly ask the Court to approve a financial consent Order. If you can't reach a financial settlement by agreement either one of you can file a document, called a form A, to start financial proceedings. There is then a series of Court hearings to ensure that financial disclosure takes place and assets are valued before a judge holds a final hearing to decide on the financial settlement and make a financial court Order. At any stage in the financial  proceedings, you can reach an agreement and ask the Court to approve a financial consent Order. The fact that divorce proceedings are based on no fault will not affect the amount you receive as a financial settlement because if a husband or wife has behaved very badly you can refer to this in the financial  proceedings. However, behaviour has to be very extreme to affect a financial settlement and the behaviour needs to be linked to financial matters. For example, allegations of domestic violence may be relevant to the financial settlement if the victim of domestic abuse cannot work and needs spousal maintenance for a period of time because of the physical or emotional impact of the domestic violence on their ability to work. If you have questions about the no-fault divorce Court process or need advice on children or financial settlement issues the divorce solicitors at Evolve Family Law are here to help.     For expert Divorce, Children and Financial Settlement advice call our team of specialist divorce lawyers or complete our online enquiry form.
Robin Charrot
Apr 06, 2022   ·   6 minute read
No-Fault Divorce

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. [related_posts] 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
Save money for home cost

Can I Change Spousal Maintenance Payments?

The news is all about the cost-of-living crisis. North west divorce financial settlement solicitors are getting calls about spousal maintenance and whether spousal maintenance payments can go up to cover increased household bills. Those paying spousal maintenance are equally worried about how they can pay their increased bills and still meet their spousal maintenance payments. In this article our divorce financial settlement solicitors answer your questions: Can spousal maintenance be changed? What triggers a change in spousal maintenance? Cost of living crisis and spousal maintenance Do bigger bills mean more spousal maintenance? Agreeing a change in spousal maintenance Applying to court for a change in spousal maintenance For expert Divorce and Financial Settlement advice call our team of specialist divorce lawyers or complete our online enquiry form Can spousal maintenance be changed? Spousal maintenance can be changed. It can go up or down or be stopped altogether. The change to spousal maintenance can be made by agreement or the court can vary the spousal maintenance payments. If you are also paying or receiving child support then the spousal maintenance can be changed independently of the child support payments. Child support is normally paid by agreement or after an assessment by the Child Maintenance Service. Spousal maintenance is usually payable by agreement or under a family court order. Spousal maintenance and child maintenance are calculated in different ways. If you are worried about how an increase or decrease in spousal maintenance could affect your child support it is best to talk to your family law solicitor. What triggers a change in spousal maintenance? A variation in spousal maintenance can be triggered by many different changes in your personal or financial  circumstances or those of your former husband, wife, or civil partner. Changes that can trigger a need to review spousal maintenance payments are: The payer or receiver loses their job and can't get another one. A business goes bust or there is a downturn resulting in reduced business profits and less income for the company directors. The re-marriage of the person receiving the spousal maintenance (this automatically stops the spousal maintenance payments). The cohabitation of the person getting the spousal maintenance ( the spousal maintenance court order could say maintenance should stop if the person receiving the spousal maintenance starts a cohabiting relationship and they live with their partner for a specified period, such as six months. In other spousal maintenance orders a new relationship involving cohabitation may not be a trigger for the automatic cessation of spousal maintenance but may justify a variation application). Increased outgoings that are reasonable in nature to incur. For example, the decision to lease a new luxury car may not thought to be reasonable increased outgoings but larger bills on the mortgage or the gas or electricity may be reasonable in nature to incur as you can't be blamed for the price hikes that are outside your control. [related_posts] Cost of living crisis and spousal maintenance The cost-of-living crisis is generating lots of questions about spousal maintenance and financial settlement options. If you are negotiating a financial settlement, it’s important to remember that spousal maintenance can go up or down or that you can negotiate a clean break financial settlement so there is no further financial liability towards your former husband or wife. A Northwest divorce financial settlement solicitor can look at the best financial settlement options for your personal and financial circumstances and can weigh up the potential cost of capitalising spousal maintenance payments at the time of the financial settlement (paying spousal maintenance in one lump sum so your former spouse gets more assets but no ongoing spousal maintenance) or the risks of agreeing to spousal maintenance and variation applications to increase the payment if cost of living rises are beyond inflationary increases. Do bigger bills mean more spousal maintenance? ‘Do bigger bills mean more spousal maintenance?’ Not necessarily. That’s because one of the issues is whether the person seeking the variation in spousal maintenance has looked at the ability of their former spouse to pay more or receive less in spousal maintenance if they too are facing higher outgoings and haven’t received a higher than inflation pay rise and have no ‘spare’ or surplus income. Every spousal maintenance question must be considered carefully as each depends on the financial and personal circumstances.  Agreeing a change in spousal maintenance You can agree a change in spousal maintenance in several different ways: By agreement or Using solicitor negotiations or Through family mediation or An application to court to vary spousal maintenance. If you agree how spousal maintenance will be changed outside the court process it’s important to record your agreement in writing and to secure a financial court order or apply to court, by agreement, to change the wording of your existing spousal maintenance order. Applying to court for a change in spousal maintenance You can apply to court to increase, decrease, or stop spousal maintenance payments. It’s best to talk to financial settlement solicitors before making an application as they can advise on your likely prospects of success or whether it is best to try and negotiate without first making an application to court. An application to the family court to vary spousal maintenance follows a similar court procedure to an application for a financial settlement in that the variation application involves financial disclosure and a series of court hearings to help you either reach an agreement or for the court to determine if the spousal maintenance payments should be varied. For expert Divorce and Financial Settlement advice call our team of specialist divorce lawyers or complete our online enquiry form
Robin Charrot
Feb 03, 2022   ·   5 minute read
Worried young woman sitting on sofa at home and ignoring her partner who is sitting next to her

How Does A Divorce Settlement Work?

The Impact of Domestic Violence On A Divorce Financial Award In this blog divorce financial settlement solicitor, Robin Charrot, looks at a recent court case involving divorce financial settlement claims and allegations of domestic violence to see how divorce settlements work and how the court treat domestic abuse allegations when making financial settlement decisions. The financial settlement A wife, age 55, separated from her husband. They could not reach a financial settlement by agreement and financial  court proceedings were started. Sadly, the scenario of a husband and wife splitting up and going to court to get a financial court order isn’t unusual but what marks this case out is that the wife was a barrister and had a property portfolio in her name, acquired through her earnings during the eleven-year marriage. The husband, age 58, wasn’t working and had not worked independently of the wife throughout the marriage. Again, there isn’t anything unusual about this save for the situation not complying with the unusual gender stereotype. However, the wife said that as well as her being the bread winner in the marriage, the husband had been violent to her on two separate occasions. The wife said that meant the husband should get nothing by way of financial award. The husband argued that wasn’t fair. The domestic violence allegation The financial court looked at the domestic violence allegations. The husband had been prosecuted but was acquitted so had no criminal conviction for domestic abuse. None the less the family court said it could take the allegations of domestic violence into account because the family court had made findings about the domestic abuse. A husband or wife should therefore not assume that just because a spouse did not report domestic abuse to the police that the family court will disregard domestic violence. However, the court also made it clear that just because there has been domestic violence in a relationship that does not mean that the perpetrator of the domestic abuse should end up with nothing. The financial court proceedings The family court ordered the wife to pay the husband £625,000 as a financial court order but the wife disagreed and appealed. She thought the ruling was unfair. The second judge said that £200,000 of the £625,000 award should be a charge to the wife, repayable by the husband’s estate on his death or repayable by the husband to the wife if the husband were to remarry or live with a new partner. The wife asked the court to reduce the lump sum payment to £425,000. On appeal, the court kept the payment at £625,000 and cancelled the charge. This means the wife has to pay the full £625,000. The court calculated that £625,000 was necessary to enable the husband to buy a new house with a budget of £400,000, with £25,000 to buy a car and pay living expenses and £200,000 to cover costs. The appeal judges concluded that the domestic violence findings did not mean there should be no financial  award or a charge back of some of the financial settlement. The appeal judges favoured a clean break financial settlement with no ongoing financial ties between husband and wife.  The costs of not agreeing a financial settlement When determining the appeal, the judge said the family financial  proceedings had become ‘an exercise in self-destruction' because the legal costs had become disproportionate to the family assets so it was hard to achieve a financial settlement that either husband or wife thought was fair. As the appeal court concluded that the findings of domestic abuse made against the husband do not justify making what would otherwise be an inappropriate order the £200,000 charge was removed giving him a lump sum of £625,000. [related_posts] The lessons from the court case The lessons from the court case are that arguing over principles doesn’t always pay as whilst the wife was the breadwinner the husband was nonetheless entitled to a financial  award to meet his needs. Those needs were not extinguished by the finding of domestic violence in the relationship by the family court although it is fair to say that the award is smaller than if no domestic violence allegations had been made. It is therefore important to raise allegations of domestic violence but not to expect that the court will make no award or an award that is lower than an amount that meets the perpetrators basic needs if the other party has his or her needs met. In this case the wife was not only a barrister, she specialised in family law. What that tells us is that it is important to get independent and impartial expert family law legal advice as early as possible. Whilst you may not like the legal advice it may save you a lot in legal costs if that legal advice enables you to reach a pragmatic financial settlement. Evolve Family Law are North West and Online Family and Divorce Solicitors For legal help and advice on divorce and family law call us or complete our online enquiry form.
Robin Charrot
Jan 20, 2022   ·   5 minute read
selective focus of couple sitting at table with divorce documents

What Are the 5 Grounds For Divorce?

If you are thinking about starting divorce proceedings you may have read that English divorce law is changing. However, that doesn’t mean that you need to wait before you start divorce proceedings or that it is in your best interests to do so. In this blog, Manchester divorce solicitor, Robin Charrot, looks at the current five grounds for divorce. Evolve Family Law offices are located in Whitefield, North Manchester and Holmes Chapel, Cheshire but we also offer remote meetings by telephone appointment or video call. The 5 grounds for divorce Strictly speaking, a divorce solicitor will tell you that there is actually only one ground for divorce in England and Wales, namely that your marriage has irretrievably broken down. However, you have to evidence the irretrievable breakdown of your marriage under current divorce law by proving one of five facts. The five facts are: Adultery or Unreasonable behaviour or Two years separation and your husband or wife agrees to the divorce or Desertion or Five years separation – your husband or wife does not have to agree to the divorce if you have been separated for five years or more. How do you prove you have the grounds for a divorce? Many people are embarrassed at the thought of starting divorce proceedings and having to prove something like adultery or unreasonable behaviour. Equally, if you are on the receiving end of a divorce petition it isn’t nice to think that you have been accused of unreasonable behaviour or adultery. You may also worry about the effect of the divorce proceedings on your financial settlement or the childcare arrangements. Divorce solicitors say that proving that you have the grounds for divorce is normally not as complicated or as difficult as you may envisage. Gone are the days when you had to send a private investigator to a hotel to prove adultery. If you want to start divorce proceedings based on adultery then all you need to say in the divorce petition is that your husband or wife has committed adultery with a person whose identity you prefer not to reveal and that your marriage has broken down irretrievably. The respondent to the divorce petition just has to confirm that adultery took place, without the need to go into further details. Importantly, if you get divorced on the basis of adultery or unreasonable behaviour the basis for the divorce proceedings is only ever relevant in any child arrangement order application or divorce financial settlement proceedings in very rare circumstances. For example, if divorce proceedings are started on unreasonable behaviour and one of the allegations is that the respondent to the divorce petition physically assaulted the child. This allegation would be relevant in any child custody case. However, just because an allegation is contained in the divorce petition that you don’t agree to, it doesn’t mean that you have to defend the divorce proceedings provided that you are in agreement that the marriage has irretrievably broken down. When are divorce proceedings contested? As it is possible to agree to get divorced without accepting all the allegations of unreasonable behaviour or without going into a lot of detail about the adultery, most divorce proceedings are not contested. After all, it doesn’t make sense to most people to challenge divorce proceedings if they accept that their marriage has irretrievably broken down and understand that the contents of the divorce petition won't affect the financial settlement or the childcare arrangements. [related_posts] Why is it best to get divorce legal advice? As it is actually easier to get divorced under current law than many people think, divorce solicitors advise that it is best to take specialist legal advice so that: You don’t assume that you should not start divorce proceedings now and instead wait until you can start a no-fault divorce when the new law comes into force You protect yourself, if necessary, by starting divorce proceedings straight away. For example, if you fear that your husband or wife is hiding money from you or transferring assets to other family members or you are worried that your spouse is spending to excess or is at risk of bankruptcy You don’t assume that you need to contest divorce proceedings based on adultery or unreasonable behaviour because the petition is very unlikely to affect either the financial settlement or child care arrangements. In addition, you can preserve your right to challenge any false allegation in the financial settlement or child arrangement order court proceedings You understand your divorce options as, for example, even if your husband or wife has committed adultery you may not be able to start divorce proceedings on that basis if you lived together as a couple for six months or more after they committed adultery and you were made aware the adultery. Sometimes your divorce options may surprise you as you can get divorced on the basis of two years separation if you have lived together in the same family home for two years provided that you have lived ‘separate and apart’ within the same household and your husband or wife consents to a divorce You protect yourself, if necessary, by either not starting divorce proceedings straight away or deferring applying for the decree absolute of divorce You understand the impact of the divorce proceedings and pronouncement of your decree absolute. For example, the impact of your separation and divorce on your immigration status if you are in the UK on a family visa or the effect of your divorce on your tax status and the tax treatment of the transfer of assets between yourself and your former husband or wife. Most divorce solicitors say that it isn’t just navigating the divorce process that is important but also understanding how your divorce fits in with any financial settlement or childcare arrangement that you either agree or ask the court to determine. We are Manchester and Cheshire divorce solicitors The friendly team of specialist divorce solicitors at Evolve Family Law can help you with your separation and divorce proceedings, child custody and contact and your financial settlement. For advice on your family and private client law needs call us or complete our online enquiry form. The Evolve Family Law offices are located in Whitefield, North Manchester and Holmes Chapel, Cheshire but we also offer remote meetings by appointment by video call or telephone.
Robin Charrot
May 27, 2021   ·   6 minute read
Serious sad woman thinking over a problem

Can You Be Legally Separated and Live in the Same House?

For those who have decided to separate or divorce, either because of COVID-19 related pressures or the global pandemic has reinforced the decision to go your separate ways, the next step is for one of you to move out of the family home. You should not permanently leave the family home without first taking legal advice. However, as Manchester and Cheshire divorce solicitors we are receiving an increasing number of enquiries where neither the husband nor wife can easily move out of the family home. Enquirers want to know if they can be legally separated and live in the same house as their estranged spouse.​ What is a legal separation? A legal separation is where a husband and wife obtain a decree of judicial separation from the family court. If you haven’t heard of judicial separation it isn’t surprising as applications for judicial separation are rare because: If you obtain a judicial separation you will still need to get divorced at a later stage, for example, if you want to remarry or if you want a clean break financial court order preventing any further financial claims between husband and wife. You don’t need a legal separation for official purposes. You can just tell agencies, such as the Inland Revenue or the Local Authority, that you are separated. Do I need a legal separation? People often assume that they need a legal separation or judicial separation decree, but they don’t unless they have a religious or cultural objection to a divorce and want to formalise their separation. If you plan to get divorced later, you don’t need a judicial separation first as you can sort out your financial affairs by signing a separation agreement. Can you separate and live in the same house? You can separate or even divorce and still live in the same house. Some couples think that if they continue to live together, they can't get divorced but that isn’t correct. Under current English divorce law, you can get divorced if you have lived ‘separate and apart’ for two years provided your husband or wife consents to the divorce. It is best to take some legal advice about the grounds for divorce proceedings as you may not need to wait two years before being able to start divorce proceedings. Living separate and apart in the same household, for the purposes of divorce proceedings, means that there must be a degree of separation between husband and wife. For example, you can't cook for one another or do the other person’s laundry or ironing or shopping. Separating and your spouse won't leave the family home. If you have taken the decision to separate and your husband or wife won't leave the family home then if things become impossible in the one house there are options, such as: An application for an injunction order – an occupation order can give you the right to occupy the family home to the exclusion of your partner until long term ownership or sale of the property is determined by agreement between you or by the court in divorce and financial settlement proceedings. An application for spousal maintenance so that you can afford to leave the family home and rent somewhere until long term ownership or sale of the family home is decided. It is best to take specialist legal advice from a divorce solicitor before leaving the family home and moving into rented accommodation. [related_posts] Separating and can't sell the family home. Most people would agree that it is a tricky housing market so whilst you may have decided to separate or divorce you may not be able to sell the family home. You can be separated or divorced and still be living at the family home though for some it won't be a very comfortable experience. Even in the best situations where you are splitting up amicably it can still feel as if you are in limbo with your life suspended until you can achieve the sale of the family home. One thing that can reduce the stress of waiting for the sale of the family home is to have a financial agreement in place so you know who will get what when the property does sell. Although you may have concerns about having to drop the sale price on the family home, a fair financial settlement can still be reached if you don’t agree to accept a fixed amount from the sale proceeds but instead you each agree to receive a percentage of the net proceeds of sale. That way you are both protected, whether house values move up or down. In divorce proceedings a financial settlement can be reached by agreement or after financial settlement proceedings but in either scenario you should obtain a financial court order that records how all your assets will be divided, including the equity in the family home, savings, and pension provision. If you are separated but don’t want to start divorce proceedings yet it is still best to record the financial settlement that you have agreed to avoid one of you changing your mind about how much you should get from the sale proceeds when you have found a buyer for the house. A document, called a separation agreement, should be prepared to formalise the agreement reached. We are Manchester and Cheshire divorce solicitors The team of specialist divorce solicitors at Evolve Family Law can help you with your separation and divorce proceedings, as well as child custody and contact and your financial settlement. For advice on your family and private client law needs call us or complete our online enquiry form.   The Evolve Family Law offices are in Whitefield, North Manchester and Holmes Chapel, Cheshire but we also offer remote meetings by appointment by video call or telephone.
Robin Charrot
Apr 22, 2021   ·   5 minute read