Posted March 9th, 2012
Where businesses are involved in divorce there are a raft of considerations which need to be thought through carefully before a financial settlement is concluded. However with the right type of pre-planning and thought reasonable settlements can be made, and time and resources used to rebuild assets into the future.
The first consideration should be to taxation and it should be noted that for the purposes of Capital Gains Tax it is the date of separation that is generally more relevant than anything happens within the divorce itself
The key here is that where a transfer is made in the same tax year as the separation there will be no taxable capital gains or losses for that matter, for the transferor. When considering the asset position of the business or partnership it is important to check ownership particularly in relation to shares or the individual asset in relation to a partnership.
Possible solutions may involve the purchase of shares or the sale of property to enable the financial settlement to be concluded.
Care needs to be taken where pensions hold assets of the business. Often we see shares and properties occupied by the business held and owned by the pension scheme.
Therefore further thought needs to be taken on how these assets are dealt with.
This is an extremely complicated area of financial settlements on divorce and it is essential that you get the right team around you to assist your negotiations. In my opinion, this would be a family lawyer, accountant and independent financial adviser.
If this is an issue that affects you please call in confidence on 0800 0921229 or email me at firstname.lastname@example.org
Posted July 12th, 2010
As a Resolution Accredited Independent Financial Adviser (IFA) I am often asked to provide a summary of how we can work with clients through the Collaborative Law process. Below is taken from a flyer which is provided to the lawyers at the Greater Manchester POD.
HOW THE IFA WILL WORK WITH YOU AND YOUR SOLICITOR:
IFAs will be accredited by Resolution to work in the collaborative area, having undertaken training on the technical and cultural aspects involved, and passed an examination on the subject.
The IFA acts as a ‘financial neutral’ – rather than representing one party, their role is to assist all parties in highlighting issues and providing information that enables the collaborative process to move quickly and smoothly.
In addition to their specialist technical knowledge, IFAs can outline options to parties and comment on risk factors (eg in terms of pension options) which solicitors are unable to do as they are not authorised to give financial advice.
IFA’s can attend a first meeting with the Solicitors present, so as to display to the parties how they may add value to the process. At your discretion, IFAs can subsequently meet you without your solicitor being present, so as to control total costs.
EXAMPLES OF WHERE THE IFA IS ABLE TO HELP:
• Tax efficiency and mitigation if assets or investments are being sold as part of the agreement (eg ISAs, Capital Gains Tax issues).
• Pension-sharing issues under occupational final salary schemes, for both the scheme member and the ex-spouse.
• Issues surrounding individual pensions, including retirement options.
• The cost of replacing items under an employee benefits package for the ex-spouse (eg life cover, critical illness cover, private medical insurance).
• Mortgage availability and costings in relation to the marital home.
• Assessment of endowment policies and the options going forward.
• General financial education
• Budgeting exercises and lifetime cashflow projections to determine whether the agreed settlement will be sufficient to support the financial requirements of each party over time.
If you require any further assistance, please contact us on 0800 092 1229 or email email@example.com