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It may seem obvious, but the starting point of working out who gets what in a property settlement is to work out what the assets are.


Sometimes that’s easy, if the assets are simply the matrimonial home, some bank accounts, shares, or other assets that have an easily identifiable value. Working out what is available for division also means taking account of the liabilities. Again, if the liabilities are mortgages, loans, credit card then these are usually fairly easily identified.

Matters can become more difficult however when the assets or the liabilities are difficult to identify.

This might be because the assets cannot be valued on a straightforward basis – for example, where there is a business or company – or where the liabilities are in the form of director’s loans, or loans between complex business structures. There is often a disagreement between the parties about valuations of businesses and companies, particularly where these form part of a larger structure.

Regardless of whether it takes place as part of formal proceedings, or by agreement in an effort to achieve a settlement by consent, disclosure of financial information will have to be given. If undertaken as part of formal proceedings, this will be done by each party preparing and then exchanging their Form E. This is a formal document in which both parties must put forward details of their assets and liabilities, as well as their financial needs.

Depending on the stage which negotiations or proceedings have reached, the exchange of the Form E will often be the first indication of disparities between the parties as to asset and liability valuations. It is useful to try and agree asset values, even if doing so means a period of negotiation. For more complex assets, a formal valuation (eg by an accountant) may be required. Where there are competing valuations however, the court may appoint a single joint expert to prepare a valuation, so that the parties, and the court, have a single valuation from which to work. Disparities in asset valuations can be vast, and much time and costs can be lost to the issue of determining asset values.

So, assuming that the value of the assets and the liabilities has been determined and a figure arrived at for what is in the “pot” for division, the court will have to consider what is available for distribution, and what are the respective needs of the parties. This will depend of course on whether there are children, whether both parties are working, or none, or either, the age of the children and whether there are any special needs, for example health factors, which may have an impact.

If one party, usually the wife, is to have the majority of the care for young children for an extended period of time, then her needs are going to be different from those of a wife in professional employment with no children to look after.

When deciding how to deal with the division of assets, the court must have regard to a number of factors set out in s.25 of the Matrimonial Causes Act 1973. These factors are:

  • The income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire;
  • The financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
  • The standard of living enjoyed by the family before the breakdown of the marriage;
  • The age of each party to the marriage and the duration of the marriage;
  • Any physical or mental disability of either of the parties to the marriage;
  • The contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family;
  • The conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it;
  • In the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.

Various cases have dealt with the concepts of “fairness” and “sharing” but the application of these principles will depend on the nature of the assets – if the assets are limited, then the court will only be able to give consideration to how best to meet the respective needs of the parties.

An agreement or order for the division of property may include any or all of the following:

  • The transfer of ownership from one party to another
  • An agreement that one party be allowed to occupy property for a period of time, at the end of which the property will be sold and the proceeds divided in accordance with the terms of the order
  • An order that pension entitlements be shared between the parties
  • The transfer of shares or business assets from one party to another
  • The payment of a lump sum, or payment in instalments
  • Payment of maintenance by one party to the other, for life or for a restricted period

As with any type of litigation, it is usually far more cost effective if the parties are able to reach an agreement themselves, even if lawyers are then engaged to deal with formalising an agreement. Court proceedings are usually lengthy and costly!

If you are facing the prospect of having to deal with the division of assets on the breakdown of a marriage or civil partnership, gather together as much information as you can about your financial circumstances and your needs. Be prepared that you must give full and frank disclosure about your circumstances, and that you will need to provide documentary evidence about everything from bank statements to property valuations.


Standout firm known for its personal insolvency work for clients including private companies, individuals and governmental institutions. Frequently acts for insolvency practitioners, assisting with the realisation of assets, both in the UK and abroad.

Chambers and Partners

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