Is this a reasonable settlement figure?

[Twinklestar80]

Myself and my stbx have been together 12yrs, married for 8 with two young children (18months and 5yrs) and I started divorce proceedings about 6 weeks ago as we just don’t work anymore. He earns in excess of £200k per year while I stopped working 5yrs ago to concentrate on the children (I was earning £32k) He’s always been extremely financial controlling and I have access to a very limited amount of money each month and have to ask constantly for the joint account (£1k) to be topped up. We’ve just had our first mediation session and he’s revealed that he’s got £65k in UK bank accounts, £75k worth of stocks in the UK, £200k pension and in excess of $1.6m in US (they’re American) stocks and assets (accrued from a family settlement 40yrs ago but in his sole name). We also have about £340k in deposit and equity in the house. During the session I reiterated that i would like a perm home for the children as mortgage free as possible (3bed in SE London) as even when I’m back to working full time when my littlest goes to school, I’ll only be able to get circa £120k mortgage. He’s told me that I’m being totally unreasonable asking him to access him US assets and that he’ll get charged at least 40-50% capital gains tax which will mean that he’d be wiped out if he gives me a large sum of money for a house. He’s said the best he can offer is half the UK savings (£30k) plus half the equity in the house (£174k) and he will try to take a second mortgage out in his name for a house for me and the kids. I’m super reluctant to do this as it’s just another way for him to retain control over us and to have a long term financial interest in any decisions I make regarding the house. I obviously don’t want to bankrupt him but do I take what he’s says at face value? Should I be asking for an independent accountant to verify his capital gains tax claims? My sole focus is ensuring my kids have a permanent and stable home.

I’ve got a solicitor who I can speak to but she’s said she can’t help with capital gains tax issues and that I need to speak to an accountant.

I would get a forensic accountant to review his assets if you are concerned that he isn’t declaring them all.

What are the CGT implications of divorce settlement?

Thats an obvious question to start with

The US assets could be worthless pretty soon so be warned

I think a forensic accountant will definitely need to come into play if we don’t make any progress. I know for a fact that he’s not including joint accounts with his name on in the US but I’m still reluctant to go to full out war as I’m acutely aware of how the assets were built up over time (from the death of his father 40yrs ago) and I know that he still has trauma over where the money has come from. I did tell him at the start of this process that I’m not out to take all his money but I do need to be able to house the children adequately.

If he’s not prepared to give up his US stocks and shares then he’ll have to give you a larger percentage of the house etc. You need a good lawyer and they will probably suggest a forensic accountant.

It's complex, but he can transfer assets to you free of tax while you're married, and broadly for three years after you're separated or until you're formally divorced (whichever is earlier). This is extended where the assets are transferred under a formal order as part of the divorce.

Good info here: www.litrg.org.uk/savings-property/capital-gains-tax/capital-gains-tax-separation-and-divorce

However, if he has to sell assets in order to give you cash, then he'll pay CGT on the gain (selling price, less original cost, less any costs associated with the purchase or sale, eg stamp duty or legal fees).

In summary, if he gives you assets or cash from bank accounts then there should be no tax to pay, but if he has to sell shares or other assets to realise cash then there will be tax. CGT is usually charged at 24%. Your lawyer will need to advise you on how that impacts on any settlement.

That’s a great question and I’m struggling to find an accountant who will discuss US/UK CGT divorce implications for less that £400 at the moment. I’ll keep looking though.

Oh hang on, just spotted that he's American. Sorry. You'll need US and UK tax advice (I only know the UK part) and that will be expensive as it's super complicated. I'm surprised that someone will give you that advice for £400, I'd expect it to cost a couple of thousand at least.

If your husband is a US citizen you/he will need to take US tax advice as well as any UK tax advice for any asset transfers or disposals. You also need to understand the type of investments and whether gains will be subject to capital gains tax rates or offshore income gains higher rates.

What works in the UK tax wise may not be efficient in the US so you need a dual qualified US/UK advisor.

Thanks for the info! It was £400 plus a £2000 retainer so it will definitely be £££

What about his pension?

You need to insist on a clean break.

what about his pension and the UK stocks? They aren’t mentioned again.

He’s claiming he can’t access it at the moment but I imagine it’s probably at least £150k +

He’s claiming he can’t access it at the moment but I imagine it’s probably at least £150k +

I desperately want a clean break so I can become independent again. He’s claiming that he can’t access his pension account at the moment but I imagine it’s at least £150k and the UK stocks are worth £104k

Claiming he can’t access the pension is sort of true as in you can’t draw down under the age limit but it’s a disingenuous answer because on divorce you absolutely can be granted a pension sharing order where part of a pension pot can be transferred to a separate pot for the benefit of the divorced spouse.

similarly just because assets come with a potential tax if sold doesn’t mean they can’t be sold so you receive a fair share of assets.

Dont believe what he says. He wants you to remain uninformed so will spin ‘facts’ in his favour. Make sure you are well advised!

With these amounts you need to find a solicitor who will agree to be paid after your divorce is finalised. I’d not agree to anything before I’ve spoken to a good solicitor.

Good luck and be careful because some people on MN will advise you to come away with £5 and just suck it up.

His “best” offer is a joke. Given his income and given the ages of your children you’ll be looking at more than half of the marital assets. It’s about meeting the children’s needs first of all and then your needs too. On his income he will be able to raise a large mortgage and afford the repayments. You won’t even if you return to work.

You won’t be entitled to share his US assets but you’d be looking at the majority of the UK ones. US assets are available if required but not on a 50/50 basis.

All assets will be calculated net of any tax that applies but he’ll still be left with a large amount to meet his own needs.

It is worth investing in a good lawyer given his stance.

Ask for more than you want. Eg 3 bed house in x location - in your sole name. 50% of a pension etc

his best offer is silly.

you need a house, he needs to pay maintenance, he needs to fully disclose all assets in his name, joint names or in a third parties which he has access to.

the starting point is 50/50 and you have the children - school fees? University fees? Clubs etc

you need a better solicitor

It doesn’t matter if he can’t access his pension now. It’s an asset of the marriage.

please get good advice on all this . He’s still financially abusing you.

He can ‘share’ his pension with you via a pension sharing order or he can give you more equity / savings to compensate you for not getting any of his pension. It’s still a marital asset and need to be ‘in the pot’

Well morally yes he’s right / you’ve only been out of work 5 years and were not a high earner and therefore he’s accrued all the wealth and assets and you’re going to benefit substantially from this divorce with assets you’d never be able to accrue on your earnings

however, legally then it all goes in the pot regardless and as you are much lower income with 3 young children you’ll end up with a substantial pot. You’ll need a high net worth solicitor experienced in international assets.

He’s lying about his pension so don’t trust him.

I think it’s unfair to say he’s accrued all of the wealth and insinuating she’s a freeloader and morally isn’t entitled to an equal share. She’s enabled him to go out and earn that money and build that pension by giving up her own career.

I think that him being enabled by op to go out and earn that money is a weak argument with these kind of figures. He earns in excess of 200k, could have afforded a live in nanny. On 32k how much has op really sacrificed, it's only 5 years (out of 40+) , plenty of time left. It sounds like you need a solicitor though.

Keep it simple just ask for a house