Can't work out financial split with husband

[noodlemcnoodle]

I am about to go back to full time work, have being working 2 days a week for the past 2 years. I have tried to talk to my husband about how to now split the shared coats but we can't agree. One of the main reasons we can't agree is because he is a limited company so pays himself a small salary and has divided. So he says that's the amount that should be used while I feel it should be the annual turnover as that's his gross salary .. He says the money in the company is the companies but to me that is his savings.. its how he refers to it when off guard! I totally want to pay my share but I don't feel it should be as much as him.. if it was I wouldn't be able to save.. things in general are not great so thinking if we were to split would the courts would his tiny salary be used or his actual gross salary ???

How have things been working while you work 2 days?

The company turn over is not his salary. His salary is what the co pay him. Child maintenance would be a nightmare.

However if you split you could try to gain a share of the company assets which could include retained profit. Sadly that might disappear down the back of an accountant’s sofa.

IMO Anyone married to a non salaried person should get a prenup or a post nup before sacrificing a career and wealth accumulation.

I earn around £880 a month and put £400 towards the family, then have £380 for me as I am paying £100 for my course. He pays £400 into joint account too and pays daughters Nursery fees.

Thanks for the heads up.. I agree I should of got a prenup.. I will inherit far more then him and my property is worth a lot more then his..

I guess there's two questions here:

• what to use as the basis for dividing up day-to-day expenses whilst you're a couple
• what income would be used by the CMS when assessing his contribution if/when you split up.

He's correct in one sense, the money in the company isn't his gross salary. It needs to pay for all sorts of things, including pension, VAT and corporation tax, company expenses like an accountant, and (depending on his business) materials, sub-contractors, you name it. Whilst it's in the company's bank account it isn't his personally, it belongs to the company.

Once he takes money out as a dividend, it becomes his money (and he pays tax on it as an individual). The question therefore is: what are your total running costs as a family, and what proportion can you pay from your salary. Assuming the company has enough money to do so, he should withdraw the difference as his dividend. He probably has a rough idea of how much the business can afford for him to extract as dividends, I track it based on the number of month of dividend/salary payments I've got accumulated, after I've set money aside for my other expenses.

So I think broadly I agree with both of you - the amount he can contribute each month should be based on his dividend, not the total amount in the company. But he should be adjusting that dividend to cover an appropriate share of the family's expenses.

If you split, I believe he can make things difficult by declaring only his salary, but from what I've read on Mumsnet it is possible to get his non-salary income taken into account.

Re if you were to split -

As I understand it there are 2 aspects – Divorce and Financial Settlement.
To know what a fair split of assets is and to reach a financial settlement divorcing parties need to know what the assets of the marriage are, and what each asset is worth.

Look at a Form E. A long document in which each party sets out their assets, income, and financial needs. You can see in it the assets that are taken into consideration upon divorce and financial settlement, for example property (the former marital home), pensions, stocks and shares etc. It also lists the documents needed that show the value of assets for example CETVs (cash equivalent transfer values of pensions - which can be requested from pension providers).

Following Form E parties exchange questionnaires (asking questions about any missing / further financial information) and then deficiencies (follow up / clarifying questions about any missing / further financial information).

To find out what some assets are worth an independent expert can be used. Property can be valued by an expert - estate agents, pensions by CETV and / or a pension on divorce expert (PODE) report and so on. It is important to decide what needs a valuation by an independent expert and factor in the costs of these.

Pensions can be very valuable – equivalent or more than the value of the former martial home in some cases. Divorcing parties might hold different types of pensions (not like-for-like, so difficult to compare without an expert). Circumstances might be complex for example an age difference or pensions in payment. One party may have stayed at home to look after children.

@AnnaMagnani and @silentpool made some useful comment on this in this thread

www.mumsnet.com/talk/divorce_separation/4664756-what-do-i-need-to-do-about-our-pensions?reply=121093079
When splitting the assets of a marriage…
www.legislation.gov.uk/ukpga/1973/18/section/25 applies
Summary here:
images.ctfassets.net/o8luwa28k6k2/2cpp2mEMwBJWJLuzTiTruB/b5397e7459154fad8927826a2c99acdd/section-25-expert-guide.pdf

The income, earning capacity, property, and other financial resource which each of the parties to the marriage has or is likely to have in the foreseeable future. As I understand it, first consideration is given to the welfare (while a minor) of any child of the family who has not yet attained the age of eighteen. The needs of each divorcing party are taken into account and as I understand it 50 / 50 is the starting point – so unequal shares based on circumstances and needs is possible, for example 60 / 40.

These offer a free advice session about pensions on divorce and separation www.moneyhelper.org.uk/en/family-and-care/divorce-and-separation/divorce-or-dissolution-how-we-can-help-with-your-pension
Free advice line (busy so keep trying) rightsofwomen.org.uk

Guides on divorce and financial settlement
www.advicenow.org.uk/guides/how-apply-financial-order-without-help-lawyer

Pensions on divorce
www.sharingpensions.co.uk/penaudit3.htm
www.mediateuk.co.uk/the-ultimate-guide-to-pensions-on-divorce/
www.nuffieldfoundation.org/news/new-good-practice-guide-addresses-shortfall-in-understanding-of-how-to-treat-pensions-on-divorce

Valuation of pensions – pensions on divorce expert report
www.collinspensionactuaries.co.uk no relation – useful website
www.collinspensionactuaries.co.uk/pension-data-collection/ templates for information required

Legal advice should be sought.

This link gives you an indication of hourly rate for solicitors
www.gov.uk/guidance/solicitors-guideline-hourly-rates
Some organisations offer free advice from solicitors and barristers rightsofwomen.org.uk/get-advice/ On their FAQs page…”Our Legal Officers and Volunteer legal advisors are all solicitors and barristers”.
Some family solicitors offer an in initial free consultation and some a fixed fee rather than hourly.
Some barristers can be directly instructed e.g., via Clerksroom Direct