Financial Issues on Divorce or Civil Partnership Dissolution

On divorce or civil partnership dissolution there are no rules in English law that prescribe a mathematical formula on how to divide assets or how much maintenance a (former) spouse or civil partner has to pay to the other. On an application by one party for financial remedies the court has a discretion on what to do, but it is guided by a number of factors:

  • It has to give first consideration to the welfare of any children under 18.
  • It has to consider all the circumstances of the case.
  • It has to look at whether a clean break without ongoing maintenance would be appropriate.
  • The outcome should be fair and in a lot of cases this means equality.

The law sets out a list of items that the court needs to take into account as part of all the circumstances of the case. These are just examples and this is not a complete list:

Financial Means

This includes the income, earning capacity, property and other financial resources which each spouse or civil partner has or is likely to have in the foreseeable future including, in the case of earning capacity, any reasonable possible increase in it. So it is no good to say for someone that they have no income because they are not working if there is no reason why they should not do so.

Financial Needs

Financial needs include obligations and responsibilities which each spouse or civil partner has or is likely to have in the foreseeable future.

The court will want to see that both parties’ needs are met. First, it will look at the needs of any children for a home and a standard of living that is similar to the one during the marriage.

After a very long marriage where the parties are close to or have reached retirement age and they own their home with a lot of equity in it, this may mean that each should get a mortgage-free home and assets and/or pensions are shared so that each has a similar income. It may also mean an order for lifetime maintenance. However, in shorter marriages and/or when the parties are younger the court will not necessarily order maintenance for more than a period a party needs to look after small children and/or build up their earning capacity, even if this will never reach the income of the other party long-term. In short marriages, the court may not provide a party with a home even if there are enough assets on the basis that they can rent and build up a deposit to buy a home later on. So, the other factors in the list are very much relevant when the court has to decide what needs-based order it may make.

Standards of Living

This means the standard of living enjoyed by the family before the breakdown of the marriage or civil partnership. So the budget for food, holidays and leisure activities in cases where maintenance is payable will vary depending on the standard of living previously enjoyed.

Ages of the Parties and Duration of the Marriage or Civil Partnership

The court takes into account the ages of each spouse or civil partner. Younger people are more able to build up their own career and pension provision than older people.

The duration of the marriage or civil partnership is also relevant. In most cases, if the marriage or civil partnership has been long, the court tends to look less on what the parties contributed or what the situation was at the day of the wedding or civil partnership registration and more towards an equal division of assets.

Since same-sex couples have only been able to register a civil partnership since 2005, but may have been living together for many years or decades before that, the courts take the entire period of cohabitation into account as they do for married couples where there has been a seamless transition from cohabitation to marriage. So the courts treat such cases as if the couple had been married or civil partners for the entire period.

Disability

Under this heading the court considers any physical or mental disability of each spouse or civil partner.

Contributions

The court will consider such contribution which each spouse or civil partner has made or is likely to make in the foreseeable future to the welfare of the family, including any contribution by looking after the home or caring for the family. This interrelates with the duration of the marriage or civil partnership. For example, the court will not put much weight on who paid the deposit to the house of £25,000 in 1995 after 30 years of marriage when the couple brought up two children, went through career development and a change of jobs. By contrast assets acquired post-separation may be treated differently to those accumulated during the marriage.

Conduct

This can only be taken into account if “it would in the opinion of the court be inequitable to disregard.” It is rare that a court puts great weight on this unless it is gross and obvious misconduct, mostly of a financial nature, such as siphoning off of funds on a large scale, or financial deception, especially in the course of the financial negotiation and proceedings in connection with the divorce or civil partnership dissolution. Even then this is a difficult argument to run. In most cases the court will simply try to deal with such issues in another way, for example adding back in funds one party has used for unjustifiable purposes to the total and then pretending that party still has those assets. An “affair” is not conduct.

Pensions

The court will consider each party’s pensions as well as survivors’ pensions which are lost on divorce or the dissolution of a civil partnership. Most UK pensions can be shared by order of the court.

Sharing

Over the course of years since this became law in the 1970s, the courts have developed several principles, one of which is that of sharing. Where a couple has built up wealth during a marriage, whether through good fortune or the hard work of one or the other partner, the court will generally share the marital assets equally between the parties (also referred to as the “acquest”). The question then is: What is regarded as being part of the marital assets and what is not? Again, this can depend very much on the circumstances of the particular case, but some broad principles are:

  • Pre-marital assets which can be clearly identified are not matrimonial assets. However, often they have been mixed up with other assets.
  • Inheritance, which has been kept separate is not a marital asset.
  • Assets which have been mixed with marital assets are rarely separated out again. So even if one partner brought a flat with, say, £30,000 equity into the marriage, which was later sold to buy a family house, now after 15 years of marriage worth £750,000 with a £250,000 mortgage and therefore £500,000 equity, the court would regard the house as a marital asset and disregard the fact that one partner contributed the initial equity from pre-marital assets.
  • The same may apply to a business which existed at the time of marriage or was inherited but has been build up significantly during a long marriage.
  • Assets build up during a period of cohabitation which immediately preceded the marriage are regarded as marital assets.
  • Post-separation windfalls or inheritance is not regarded as a marital asset.
  • The courts are reluctant to find that one party’s effort resulting in wealth was so outstanding that they should receive a higher share of the assets, and this is rarely ordered in exceptional cases.
  • Judges are not keen on accounting, so they mostly take a broad-brush approach to the division.
  • Assets are offset against each other rather than realising each asset and sharing the sale proceeds.
  • Any needs-based claim might come first.

Whether the sharing principle is even relevant or will be the main guiding force for the court depends on the circumstances and in particular the wealth of the family. If needs have to be met, sharing may be irrelevant. If both parties have their housing and income needs met from their own resources, sharing may be the main guiding principle.

Other Considerations

There is no provision in English law that pre-nuptial or other agreements made between the spouses are binding (or pre-registration agreements for civil partners), but they can be very persuasive to the court. However, the parties’ needs would usually be taken into account first and have to be met.

Both spouses or civil partners must provide full disclosure of their financial position so that a proper financial arrangement can be made.

Both spouses or civil partners should obtain independent advice from a specialist English family solicitor to ensure that they know where the court order may lie in their case. Even if the parties are dealing with matters in mediation or have reached an agreement, they should discuss this with a family lawyer to ensure that there are no pitfalls, such as that one party takes on a tax liability that will only become apparent at a later stage.

Even if an agreement is reached, it is vital to get the court to approve the agreement in the form of a consent order so that there can be no come-back if one party changes their mind or circumstances change.


If you litigate through the courts about finances, this is naturally going to cost money on lawyers (as well as lost wages for days in court and stress etc). You may therefore argue about a shrinking cake to divide. Mediation is a good and inexpensive way to come to an overall settlement without going to court. Therefore, it is compulsory in most cases for anyone who wants to make an application to the court for a financial order to attend a Mediation Information and Assessment Meeting (MIAM) first.

For advice on your specific circumstances contact Andrea Woelke who works as a consultant solicitor at Josiah-Lake Gardiner Solicitors: ring Andrea on 020 3633 0338 (+44 20 3633 0338 from abroad) or him (stating your full name, the full name of the other person in your case and your telephone number on which we can call you).

Please note that Josiah-Lake Gardiner Solicitors do not have a contract to take on cases on legal aid. To check if you may be able to get legal aid please go to this government website and contact a solicitor who has a legal aid contract.

7  February 2024 by Andrea Woelke