The past year has sadly put huge strain on many relationships and an increase in divorce, with couples locked down together for months on end whilst trying to work remotely and home school their children, bringing relationships to breaking point. This brings financial challenges.
Separating your finances when you divorce
When a couple divorce, they need to decide how to fairly divide financial assets such as their home, money in current and savings accounts, investments and pensions. For example, they may be entitled to a share in the sale of their property, or a portion of their ex-spouse’s pension. They may also have to make decisions about the value of maintenance payments required to maintain their and their children’s lifestyle.
Currently, however, the heightened stress and reduced financial circumstances caused by the pandemic may make coming to an agreement more difficult. If a couple is unable to agree, they may still be able to settle out of court by hiring a trained mediator or collaborative lawyer. If not, they may have to ask a court to decide.
Talk it through
We can help couples divide their assets tax-efficiently and guide individuals through how to best invest the proceeds of a settlement. We can also help set up comprehensive protection cover and help people manage their post-divorce expenditure.
It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding of taxation and can be subject to change in future. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK; please ask for details. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. If you withdraw from an investment in the early years, you may not get back the full amount you invested. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency. Taxation depends on individual circumstances as well as tax law and HMRC practice which can change.
The information contained within this article is for information only purposes and does not constitute financial advice. The purpose of this article is to provide technical and general guidance and should not be interpreted as a personal recommendation or advice.
The Financial Conduct Authority does not regulate advice on deposit accounts and some forms of tax advice.
