Separating assets after divorce: dividing property

During the divorce process, you must consider a variety of factors. Not only will you have to agree on children arrangements and the division of your finances but you will also have to consider how you will split the property you own. If you wish to transfer ownership of the property from one to the other, you will need to go through a process called ‘transfer of equity’. To do this, you will need to employ the services of a regulated professional.

Whilst the process may be relatively straightforward, in some cases it can be more complex – especially where the property is the main asset within the financial settlement of the divorce.

Equity Transfer

Transfer of Equity is the legal process required to add or remove someone from the title deeds of a property. If you are removed from the title deeds, you are removed as an owner. Money (or a monetary equivalent) may need to change hands and the remaining owner may need to take over liability for an existing mortgage or re-mortgage the property with a different lender.

Selling a property is quite different from an equity transfer. If equity has been transferred, at least one of the parties remains an owner of the property, namely, the person who receives the equity transfer.

Who owns the property after divorce?

During the divorce process, you and your spouse may decide that you wish to sell the marital home and divide the net sale proceeds or you may decide that you wish to transfer the equity so that one spouse becomes the sole owner of the property. Your decision will be based on a number of factors including the financial income of the parties, the original owner of the home (if one spouse moved in after the other party already owned the property) or if one of you is planning that the children will remain living with you at the property.

Overall, it is up to you during the divorce to decide how the property and your other assets will be divided. This will be outlined and included in your final divorce settlement.

What is a consent order?

A consent order is used to record the details of a divorce settlement. It is used when you have agreed on the details of your divorce, including assets, liabilities, pensions and income. Once finalised, a consent order is presented to the Court to make it legally binding. Thereafter, one party will be unable to make future claims against the other relating to their finances or other assets which is why obtaining a consent order is advisable.

If you are unsure, consult a trusted solicitor to talk you through the process and ensure that all necessary grounds are covered to protect your future.

Capital Gains Tax Updates 2023

As of April 2023, the rules surrounding transfer of equity are being updated. The update will mean that couples will no longer need to settle their estate within a year of divorce and pay Capital Gains Tax (CGT) bills. The update will bring a period of up to three years during which to make no gain or no loss transfers of assets between spouses when they no longer live together. In cases where the assets involved are the subject of a formal divorce agreement, there will be no time limit.

With existing law, when a couple separates, no gain or no loss treatment is only available concerning disposals during the remainder of the tax year in which the separation happens. Following that, transfers are treated as normal disposals for CGT purposes.

For more information about the CGT update, click here.

Equity Transfer Solicitor Near Me

It is inadvisable to attempt to complete a transfer of equity by yourself. It will also not be possible if a mortgage is involved since any mortgage lender will require a solicitor to represent them. It is also essential that any dealings with the property are correctly registered with the Land Registry.

Solicitors Financial Settlement Blackheath

At Beverley Morris & Co., we understand that although you may believe your separation to be amicable and straightforward, issues surrounding equity transfer and your financial settlement may not be so straightforward, therefore we recommend that you take advice from an experienced solicitor.

Our divorce and property teams will work harmoniously to ensure that all relevant ground is covered, prioritising your understanding of your legal rights and all your available options.