How are assets divided in divorce?

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When a relationship breaks down and divorce becomes the only option, it can be difficult to fully consider every issue related to joint assets and finances between you both. This is especially the case when there are children involved that must be cared for.

Going through a divorce can be a turbulent and stressful time and negotiating asset splits can only add to this. In these situations, a specialist family solicitor is a worthwhile investment. They can help divorcing couples to focus on what is important and help them to achieve a timely and amicable resolution where possible.

Expert Family Law have a panel of family lawyers with the experience and expertise required to assist you throughout the divorce process. They can assist from applying for a divorce, right through to finalising the divorce and dealing with the division of assets on divorce.

What am I entitled to in a Divorce Settlement in the UK?

What you are entitled to in your divorce settlement will depend on the circumstances of the divorce. Matrimonial assets are typically the part of the settlement that is the most up for debate. Matrimonial assets can be acquired by either party during the length of the marriage or with income earned while being married.

Generally, the two most significant matrimonial assets are either party’s pension and the family home. Other matrimonial assets can include:

  • Banked finances and savings accounts
  • Vehicles
  • Real estate properties
  • Investments and stocks
  • Businesses

Anything that was owned prior to the duration of the marriage is considered as non-matrimonial. Non-matrimonial assets are typically excluded in a divorce settlement unless the matrimonial assets do not add up to a sufficient amount for either party.

Do I need to go to Court to decide on a financial settlement?

If you and your former spouse can agree on a financial settlement that suits you both then this is perfectly acceptable. Although, it is advised that you discuss with a family law solicitor regarding your settlement plan to ensure that you are fully aware of your joint marital assets and their worth. You may also wish to make your agreement legally binding by obtaining a Court Order.

Mediation can also be used to reach a financial agreement without the need to go to Court. Family mediation is conducted by a neutral, qualified mediator who will help both parties to communicate with each other and enable you to reach a decision with their help. This will be done through a number of mediation meetings.

It is often recommended that mediation is attempted before initiating court proceedings as it can be less expensive, and it can be easier to solve any differences. However, it is important to note that the outcome of mediation is not legally binding.

If you cannot agree on how to divide assets through discussion or mediation, then court proceedings can be pursued.

How are assets divided in divorce in the UK?

So, how are assets divided in divorce? In the UK, divorce settlements typically aim to achieve a 50/50 split for both parties. However, this split is not always achievable due to other circumstances that arise. This means that one party may receive a larger proportion of the matrimonial assets than the other.

The Court must consider several factors included in section 25 of the Matrimonial Causes Act 1973 as well as the Civil Partnership Act 2004 when dividing assets in a divorce. This includes the financial needs and income of each party, as well as the family’s standard of living enjoyed prior to the divorce.

In terms of income, if either party has high earning potential, then this will be accounted for. The income is then considered against the financial responsibilities that each party has or will have in the future.

Finally, if the conduct of a party to the marriage was particularly severe and it would be unfair to disregard it, then this may be taken into account. This is typically for cases of domestic abuse with long lasting effects.

What orders can the Court make?

In divorce, the Court has the power to make a variety of orders. Some of these orders include the following:

Payment of a lump sum

The Court can order a party to pay the other party a lump sum or a series of smaller sums.

Transfer or sale of property

An order for the sale or transfer of any form of property can be made by the Court. The most common is the matrimonial home. An order can also be made for the property to be sold and the proceeds of the sale to be divided between the parties.

Pension sharing

The Court has the power to order the division of pensions between parties. This is known as a pension sharing order.

Spousal maintenance

A maintenance order can be made in which a party must pay the other maintenance payments until one party remarries or for a specified period of time. In many cases, it will not be appropriate for either party to receive spousal maintenance. In these cases, the Court will typically make a ‘clean break’ order. 

Child maintenance

When a maintenance figure for a child has been agreed upon for the foreseeable future, the Court can approve the maintenance within a Consent Order.

How can divorce solicitors assist?

Divorces bring up a lot of issues to consider, from financial settlements to the sharing of childcare.

It is possible to manage your divorce or dissolution yourself using an online service provided by the Court service. However, many parties to a divorce opt to use divorce solicitors to make the process easier and as stress free as possible. A divorce solicitor will:

  • Provide you with the right advice
  • Assist you with paperwork, forms and applications
  • Assist in avoiding court
  • Ensure your best interests are considered
  • Help you come to an amicable conclusion
  • Assist in finding undisclosed or hidden assets and information

Throughout the process of divorce in the UK, you will need someone experienced in this field of law to fight for your best interests. Having the right team on your side can make the divorce process as stress free as possible during this difficult time.

If you are still asking the question “how are assets divided in divorce?,”contact us today.

Our panel of divorce solicitors

Our panel of friendly and professional divorce lawyers have the expertise and experience to deal with your case professionally and with empathy. They will guide you through the divorce process, helping you to make the difficult decisions in an understanding, non-judgmental manner.

Our panel of divorce solicitors and experienced family law firms will help you to navigate a range of issues and disputes, such as financial matters and will assist you in reaching an agreement on such issues.

Each solicitor we work with is authorised and regulated by the Solicitors Regulation Authority (SRA)

Whether you are going through a divorce or dissolution of a civil partnership, our panel of family law solicitors will provide pragmatic legal advice and assistance, guiding you through every step of the process.

How are assets divided in divorce – FAQs

How are digital assets, like cryptocurrency and online businesses, valued and divided in a divorce? 

Digital assets, including cryptocurrencies and online businesses, are treated similarly to other assets in a divorce. They must be valued, which can be complex due to their volatile nature (in the case of cryptocurrencies) or the intricacies of valuing an online business. Independent valuations may be required to determine their worth at the time of the divorce.

Once valued, these assets are included in the matrimonial pot for division. The principle of fairness guides the division, considering factors such as the needs of each party, the length of the marriage, and contributions made by each spouse.


What happens to inheritance received by one spouse during the marriage?

Inheritances are not automatically considered matrimonial assets in England and Wales. However, the treatment of inherited assets depends on several factors:

  • Commingling: If the inheritance has been mixed with matrimonial assets or used for the family’s benefit (e.g., in purchasing the family home), it may be treated as a matrimonial asset and subject to division.
  • Timing and Needs: The timing of the inheritance and the financial needs of the parties can also influence how an inheritance is treated. An inheritance received shortly before the divorce proceedings may be treated differently than one received early in the marriage.
  • Ring-fencing: In some cases, courts may “ring-fence” inheritances as non-matrimonial assets, especially if they have not been commingled with matrimonial assets and the other party’s financial needs can be met without recourse to the inherited assets.

How are future earnings or potential increases in asset value considered during the asset division process?

Generally, future earnings are not divided as part of the asset division process. However, they can be relevant to spousal maintenance decisions. The court may award maintenance payments from one party to the other, based on the disparity in their earning capacities and future potential earnings.

Potential future increases in asset value are not usually divided at the time of divorce. However, the current value of assets with high growth potential (like a business) is considered in the division.

In some cases, mechanisms such as deferred lump sum payments or shares of future sales proceeds can be arranged to account for potential increases in asset value.


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