Divorce in UK and finance

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Divorce in UK and finance

Of course, divorce isn’t a very pleasant emotional affair. So, therefore it is worth to ensure that everything runs smoothly as far as possible in financial terms. Here, there are some tips for people who decide to divorce in the UK.

First, we should avoid the courts

Of course, everything depends on our situation, but as far as possible it is worth avoiding judicial confrontation. In the UK, such hearings are really aggressive, and they can cost us a lot – both emotionally and financially. Especially if we have children it is worth avoiding hearings. Court proceedings usually terminate all contacts between spouses – so they sometimes must say publicly all secrets of their marriage.

It is worth keeping good contacts, if only for the sake of the child. It is also worth knowing that in the UK court documents are publicly available. Anyway, it is mainly because celebrities and politicians so rarely decide to divorce before the courts.

In some cases we have no choice but to go to court, for example, when our ex-spouse or spouse try to conceal assets. We can issue the request for freezing the assets of our partner. And we have no other choice than going to court. When the other party decided to conceal the property, it is worth to assume that the negotiations or talks do not make much sense in this situation.

„Man can do ten times wrong, then he can do well and people will take him back to his heart. But if he does the opposite: ten times well and then once wrong, no one will trust him anymore.” Jonathan Carroll – Beyond Silence

Wykres rozwodów w UK

Who will keep the house, who will keep a pension?

Of course, the key issue in almost every divorce is the division of property. And usually the most valuable here is the house. And this one is usually accounted for a woman. Why is this happening? In the vast majority, a woman gets the right to constant child care, so therefore she gets a house. The man usually gets the pension rights that we get for the marriage period.

Theoretically, it can be profitable for both parties, but it’s worth looking at in detail. For example, you may find that your planned retirement will far exceed the value of your house. But it may also be that the retirement that will remain for a woman in such a case will be too low to live for it. We need to think about all these things before we choose a solution. But even if the woman gets a house and the prospects for a good retirement will not be too optimistic for her, she has a lot of different options to choose from.

For example, she can sell a house and move to a smaller one. She can spend the saved money on a pension fund or save it. In practice, however, a lot of women choose to stay in a larger house, because of emotional reasons. Of course you can decide on the other, simpler solution – just to sell the house and share the profits.

rozwód w UK jak to wyglądaAnd, how to divide other assets and liabilities?

At first glance the best idea is to divide the property in half. In practice, however, this is relatively rare. If there is a judicial confrontation, first the justice system will want to secure the children materially. So, more will be given to the person, who will take care of the children constantly.

The court will also assess how much each party to the dispute is able to earn and how he/she approaches finances. The matter of the inherited property is also quite interesting. If either party has received inheritance during the marriage or even during the divorce, then she//he will have to share it. As far as we will go to court and we do not have intercourse.

What if we have common loans? In this case both parties are responsible for the repayment. It is also not possible to close a bank account before the entire loan is repaid. But you should ask in this case to freeze your account. Everything is so that one of the parties does not take any further loans, which would then have to repay both parties. However, it is worth informing the bank or the lender that we are going to get divorced. Perhaps they will show some flexibility and will be able to offer some solutions that are beneficial to us.

What if one party worked and the other did not?

If both spouses worked during the marriage, the matter is not particularly complicated. Even if one of the parties earns much less, she/he probably will still be able to live off work. In a different way it looks like one side earns and the other one is at home. If children are young, of course, the other side will receive alimony. But they will end some day…

If one party worked, the other one took care of home, then the other one will probably receive lump sum. They are usually quite big, especially when such divorces end up in the courtroom. We must remember, however, that this money, even if significant, will not allow us to normally cover all our maintenance costs for the rest of our lives. So in this case you can think of investments or return in some form to the labor market.

However, if you think that the divorce does not concern you and it will not be necessarily, you should get to know the financial advantages of marriage in the UK.

Kiedy ludzie rozwodzą się w UK

Divorce and taxes

When preparing for divorce, we cannot forget about tax issues. In this case, we may be required to pay capital gains tax (CGT). However, we will only pay it when the sum, that we will receive, will exceed £ 11,100. It is important to remember that after divorce we may be entitled to additional tax refund. We can take even Child Tax Credit – the aim of this is to help poor families and the use of this privilege does not mean that we will not be able to take other benefits to children.

It is also worth remembering that we do not have to decide on an adversarial divorce process. In the end, only a lawyer often takes advantage of this. It is worth considering whether to go for example by arbitration or mediation services.

Therefore, division of property can be very painful for some people, and very badly affect the relationship of ex-spouses and it will affect also the children.

NOTE: I present private opinions and I am not responsible for the readers’ decisions. I always try to present current information but may no longer be up to date. Therefore, before making a decision, please verify them and consult a licensed financial adviser.


Hey! Nazywam się Radek i na codzień ciężko pracuję w Anglii i myśl, że na emeryturę będę mógł przejść dopiero po 68 latach nie jest mi na rękę. Dlatego udowodnię, że jest to możliwe w wieku 55 lat a może i wcześniej. Zobacz na tym blogu jak chcę to osiągnąć.


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