One of the key parts of a divorce is agreeing how your assets will be shared between you and your ex-partner. A common misconception is that your assets are split 50/50. While that’s often the case, it is not a hard rule. The split can be more complex depending on your situation and will be determined by the court.
In this guide, we’ll explore how assets are commonly divided for divorces in the UK, as well as other factors that may influence the outcome.
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What counts as an asset in a divorce?
Put simply, an asset is anything you own that has financial value. During a divorce, all assets need to be disclosed and may be considered in the final settlement, regardless of whose name they’re in.
Under UK law, assets are typically grouped into two categories:
Matrimonial assets
This covers assets acquired during the course of the marriage or civil partnership. They’re usually considered part of the ‘matrimonial pot’ and are the starting point for division. This can include:
The family home (even if only one party is named on the mortgage)
- Joint savings or investments
- Pensions (both private and workplace schemes) built up during the marriage
- Cars, household items and valuables
- Business assets or shares acquired while married
Non-matrimonial assets
These are assets acquired before the marriage, after separation, or were inherited or gifted to one spouse individually. This can include:
- Property owned before marriage
- Inheritance received solely by one spouse
- Personal gifts (not jointly used or shared)
In certain cases, non-matrimonial assets can be included in the financial settlement, such as if:
- The marriage was long (e.g. over 10 years)
- The asset has become associated with marital finances (e.g. using inherited money as a house deposit)
- There aren’t enough assets to meet both parties’ needs
How are assets usually divided in a divorce?
When it comes to dividing assets, the court doesn’t apply a fixed method or automatically split everything 50/50. Instead, the court’s starting point is to look for a fair outcome based on the individual circumstances of the couple.
In some cases, a 50/50 split may be appropriate, particularly in longer marriages where both parties contributed equally, whether financially or through roles like raising children.
In other situations, the division might be unequal, such as a 70/30 split, especially where one person has greater financial needs (e.g. caring for young children) or where assets were brought into the marriage by one party.
What does the court consider when dividing assets?
In England and Wales, the court follows Section 25 of the Matrimonial Causes Act 1973 when deciding how to divide assets. This law sets out key factors a judge must consider when assessing what’s fair:
- The welfare of any children under 18, always the court’s first priority.
- Each party’s income, earning capacity, property and other financial resources, including future earning potential.
- Financial needs, obligations and responsibilities, what each person reasonably needs to maintain a standard of living.
- The standard of living enjoyed during the marriage, the aim is to minimise disruption where possible.
- The age of each party and the duration of the marriage
- Any physical or mental disability
- Contributions made by each party. Both financial (e.g. earnings) and non-financial (e.g. childcare).
- The value of any benefits lost as a result of the divorce, for example, loss of pension entitlements or spousal benefits.
The court has broad discretion and will weigh all these factors carefully. The final decision will be based on what is fair and reasonable for both parties and any children, not simply a split of the assets.
Do you have to disclose all assets in a divorce?
During a divorce or dissolution of a civil partnership in England and Wales, both parties are legally required to provide full financial disclosure. This means you must be completely honest and transparent about all your assets, income, pensions, debts and financial interests.
This applies whether you’re negotiating privately, using mediation, or going through the courts.
Hiding, undervaluing or failing to disclose assets is considered serious misconduct and can have legal consequences. The court can:
- Reopen a financial settlement, even after it’s been finalised
- Impose penalties or cost orders
- In extreme cases, treat it as contempt of court, which could result in fines or imprisonment
The court takes dishonesty very seriously, and full disclosure is essential to reach a fair and lawful agreement.
If you’re negotiating outside of court, both parties usually complete a Form E, a detailed financial statement supported by documentary evidence. If the case goes to court, Form E is a mandatory part of the process.
Do I have to go to court to divide assets?
While the legal principles used by the courts provide a framework for dividing assets, many divorcing couples can come to a financial agreement without going to court. This is often achieved through:
- Negotiation between solicitors
- Mediation
- Collaborative law or round-table meetings
These methods can often be quicker, less stressful, and more cost-effective than going to court.
Once an agreement is reached, it’s essential to formalise it with a consent order. This is a legally binding document submitted to the court and approved by a judge. It gives both parties certainty and protects against future claims, even if neither of you ever had to step foot in a courtroom.
What happens if we cannot agree on how to divide our assets?
In the event that you and your ex-partner can’t reach an agreement on how to divide your finances, you may need to ask the court to decide for you. This is done by applying for a financial remedy order through the Family Court.
Before applying, you’re usually expected to attend a Mediation Information and Assessment Meeting (MIAM), unless an exemption applies (such as domestic abuse or urgency). This meeting assesses whether mediation could help you reach a resolution without going to court.
If mediation isn’t suitable or doesn’t lead to an agreement, the court process will typically involve:
- Filing an application for a financial remedy order.
- Full financial disclosure by both parties is mandatory and must be honest and complete.
- A series of court hearings, including:
- First Directions Appointment (FDA): To identify key issues and next steps.
- Financial Dispute Resolution (FDR) hearing: A judge will help the parties try to negotiate a settlement.
- Final hearing: If no agreement is reached, a judge will impose a legally binding decision.
While going to court can provide a definitive solution, it can be more time-consuming (often taking several months or more). It can also be expensive, especially if it proceeds to a final hearing.
That’s why the court encourages couples to resolve matters outside of court whenever possible. However, if agreement simply isn’t possible, the court will come to a decision that is legally binding on both parties.
What happens to debts in a divorce?
It’s not just assets that need to be divided; debts are also taken into account. This includes debts like mortgages, loans, credit cards, and other financial liabilities.
The court aims to achieve a fair division of both assets and liabilities. It will look at:
- Who incurred the debt and why
- Whether the debt was for joint benefit or solely for one person
- Each party’s ability to repay the debt
Debts will be considered alongside all other financial circumstances when deciding how to divide everything.
There are two types of debts to consider:
Joint debts
If a debt is in both names, such as a joint mortgage, loan, or overdraft, then both parties are jointly and severally liable. This means the lender can pursue either person for the full amount, regardless of who spent the money or benefited from it.
During the financial settlement process, the court will consider how to divide joint debts fairly. For example, one party might agree to take on a larger share of the debt in exchange for receiving more of the assets. However, this does not change your legal liability to the lender.
Individual debts
Debts taken out in one person’s sole name are usually considered their responsibility. However, the court may still take them into account, especially if:
- The debt was used to pay for joint expenses or benefit the family (e.g. a holiday, household bills, or a car used by both parties)
- The other party encouraged or agreed to the borrowing
In such cases, the debt may be treated as matrimonial debt and factored into the overall financial settlement.
How is property handled in a divorce?
Property is often one of the most significant assets to be considered in a divorce. It can include the family home, as well as any buy-to-let properties, second homes, or properties abroad.
The family home
The family home is usually treated as a matrimonial asset, regardless of whose name is on the title deeds. Unless there’s a clear legal agreement stating otherwise (such as a prenuptial agreement), it will be included in the overall division of assets.
Options for dealing with the family home include:
- One party buying out the other’s share
- Selling the property and dividing the proceeds
- Transferring the property into one party’s name (sometimes with a Mesher order, delaying sale until a future date, often when children turn 18)
The court’s main concern is meeting the housing needs of any children and ensuring both parties have suitable accommodation post-divorce.
Other properties
Investment or rental properties are also considered matrimonial assets if they were acquired during the marriage or used for family purposes. They may be sold, transferred, or used to offset other assets during the settlement.
How are business assets handled in a divorce?
If one or both parties own a business, it will usually be treated as a financial resource to be taken into account during the divorce settlement. That applies to sole traders, partnerships, limited companies, or shareholdings.
Valuing the business
The first step is often to obtain a professional business valuation, usually by an independent forensic accountant. This ensures the business is fairly valued and helps the court or solicitors determine its relevance to the overall settlement.
What the court considers
When dealing with business assets, the court will look at:
- The value of the business
- How much income it generates
- Whether the business is a matrimonial asset or was established before the marriage
- The extent to which each party contributed (financially or otherwise)
- Whether the business can be divided or if it should remain with one party
The court typically aims to preserve the ongoing viability of the business, especially if it provides income to support children or both parties. That means the court may award the business-owner a larger share of the business in exchange for the other receiving more of the money or property assets.
Common outcomes
- One party keeps the business and offsets its value with other assets
- Spousal maintenance is used to balance income generated by the business
- In rare cases, shares may be transferred if both parties are involved in the business
Legal advice when you need it most
At BGW Solicitors, we understand that the end of a relationship can be emotionally and financially overwhelming. With extensive experience in family law, our solicitors are here to support you with practical advice and tailored legal solutions.
Whether you need help with divorce, separation, financial arrangements or child-related matters, we’re here to help you move forward confidently and with clarity.
We offer consultations in person across our offices in the South and West, or virtually if preferred. For expert legal support, contact us today to arrange an initial consultation.