Divorcing an ltd director

[dontwanttostay]

Hi all, I have looked through many topics but haven’t found a similar situation to mine so I am creating my own thread.

DH and I have been together 9 years, cohabiting for 7 years, married for 3 years. We had a child together 6 years ago, another one 3 years ago.

I have always worked and I have mainly been the main earner while he has been employeed as PAYE. Around 5 years ago, he created an ltd and started contracting with quite a high daily rate, meaning he had around £150k coming into the company each year. From these, he has been drawing £50-65k per year mainly as dividends to take advantage of the better tax rates.

Financial information:
My salary: £85k per year including bonus
His salary: £50-65k per year, mainly dividends
House equity: £130k (more like £70k if we account for estate agent fees in the event of selling and the penalty for paying off the fixed mortgage early). We own the house 50-50 and put the same amount on money as deposit and ongoing maintenance.
Car loan: PCP which goes out of joint account but is in his name (we contributed equally for the deposit and each pay half of the loan amount)
My pensions: £75k
His pensions: £100k
My investments: £8k
His investments: £40k
Money on the business:£100k (owed to HMRC around £6k)

I am hoping to get the majority of time with the kids, and I would like to stay in the family home mainly because it will cost a lot of money to move given the fixed rate mortgage term expires in 4 years.

I don’t want to be unreasonable, so I was thinking that we should each keep our pensions, investments, and he keeps the business money, but I ask for the family house to be transferred to me in lieu of any share of the business/investments/pensions. The remaining mortgage is £400k so I want to avoid remortgaging due to affordability calculations (although I am more than comfortable to pay the monthly amount). Ideally he would also contribute to the kids expenses; £500 pcm would be more than enough to cover food/clothes/other expenses.

Do you think this is a good starting point for the negotiation? I hope I won’t have to pay spousal support to him; he can always choose to give up his current contract and use the business money until they run out to pretend he is in not working…

No, always go for more and negotiate down to what you want.

Get legal advice too, that is so complicated!

@MaybeCrazy2, I see what you mean. Thanks for your response.

I believe that if I insinuate that I will go after a share of the business/pension/investments, he will go crazy and try to fight back. I thought that I can be upfront from the beginning, and say that I won't do that if he is willing to leave the house to me. I don't think he will want to keep it anyway, and it makes no financial sense to sell it at this point.

I am scared that he will try to play "uneployed" to avoid any maintenance for the kids or try to actually get spousal maintenance from me. I hope we won't get that far...

You still have to go through mortgage affordability when taking over house with mortgage. Speak to mortgage company to see how feasible it is.

If you're getting on well with your ex, then mediation or collaborative law might help you get to a resolution where you have both been advised and both feel confident that you have a reasonable settlement.

Hmm, I am not sure how the transfer of property works but I definitely need to have a look at that. I would like to avoid going through a remortgage...

I will speak with a solicitor and take it from there.

@dontwanttostay I would contact mortgage provider and an independent. Even if you don't do a full remortgage, in order for you to take on the mortgage they will do affordability checks, its unavoidable as the mortgage provider has 'a duty of care' that you will not be putting yourself under undue duress financially...which coincidentally means that they shouldn't have to chase for arrears/repossession.

Thank you all for your responses! It looks like I can't avoid the affordability checks, so I will have to have another look at what we can do with the house. We might just have to postpone things until the mortgage is due for renewal and the amount is lower so I can afford it...

Unless you are confident that you have calculated the affordability correctly, I would contact your provider/an independent and let them tell you if you can afford it because if you are hoping to have the children most of the time then you will be getting some child maintenance (although depending on what your OH is like, he might suddenly start taking reduced dividends to lower his income). Whenever you separate and you have any assets it will only be as simple as you and your ex make it. Sometimes seemingly caring and reasonable people can suddenly become less so.