Dividing investments and savings during divorce or dissolution

Money Advice Service

Investments and savings will generally form part of your financial settlement on divorce or dissolution. Dividing them should be relatively straightforward if you can negotiate with each other. But you may need to value them and pay tax or charges if you sell or transfer them or cash them in. Find out what you can do.

How investments and savings are treated

England, Wales or Northern Ireland

Investments and savings can be taken into account as part of your overall financial settlement.

However, some assets, such as money or property you or your ex-partner (husband, wife or civil partner) inherited or owned before you married or entered into your civil partnership might not be treated the same as others.

Scotland

Generally, only investments or savings you and your ex-partner have built up during the time you have been married or in a civil partnership are taken into account as ‘matrimonial property’.

However, any increase in the value of investments or savings you or your ex-partner had before you got married or entered a civil partnership could be taken into account in some circumstances.

This can be a complicated area; if you are in any doubt, get professional advice.

Find out who can help by reading our guide on your options for legal or financial advice on divorce or dissolution.

Dividing savings accounts

The process of separating your savings might be different, depending on the type of account you have and whose name it’s in.

You might have:

Cash ISAs

These can only be held in one person’s name (and not jointly).

If you want to give your ex-partner money from your cash ISA you’d have to take out the money you want to give them.

You couldn’t transfer the money from your own ISA directly to theirs.

Savings accounts

These are more straightforward and you could simply transfer some money from your account to your ex-partner’s.

The only difficulty might be if the money is in a notice account.

If that’s the case, you will have to ‘give notice’ and tell your bank or building society that you want to take out your money.

If you don’t, you could lose some of the interest.

If the money is in a fixed-rate savings account, you might not be able to cash it in before the term is up, or if you can, you might lose a substantial amount of interest.

Investment property

Once you know the outcome of your financial settlement, you’ll need to work out whether you want to sell, continue owning, or renting out investments such as a buy-to-let property or a holiday home.

Contact your lender if you need to take your or your ex-partner’s name off the mortgage – and consider talking to a mortgage broker if you think you’ll need to remortgage.

Valuing your investments

You should be sent a statement every year telling you how much your investments are worth.

However, this might not be same as the amount you would get if you cashed in or transferred your investments.

Instead, depending on the type of investment, the value might be the:

  • Transfer value
  • Surrender value

Your first step should be to ask the investment company for an up-to-date valuation, or transfer or surrender value.

You might have:

  • Bonds
  • Investment bonds
  • Stocks and shares ISAs
  • With-profits policies, such as an endowment
  • Unit trusts, investment trusts or OEICS (open ended investment companies)

Understanding the costs of cashing in investments

Cashing in your investments might not be the best option, because you might have to pay tax and extra charges.

  • You might have to pay Capital Gains Tax (CGT) if you cash in or sell an investment and make a profit. You have an annual CGT allowance, which means you can make a certain amount of profit – once selling costs and fees are deducted – and not pay this tax.
  • You don’t have to pay CGT when you’re selling your main home or stocks and shares ISAs. This is a complicated area so it’s probably well worth getting advice from an independent financial adviser or accountant. You will have to pay for their advice.
  • Depending on the investment you have, you might have to pay charges if you sell or cash it in early. Even if you don’t, you might lose out if you sell share-based investments when the stock market is at a low level.

Transferring or selling shares you own

If you own shares you can either transfer them to your ex-partner or you can sell them so you can give them the money instead.

It’s worth taking advice from an independent financial adviser or accountant about which is the best option.

  • You can transfer shares to your ex-partner by filling in and signing a ‘stock transfer form’ (otherwise known as a ‘J30’ form). You might be able to download this directly from the website of the company you own shares in.
  • If you have a stockbroker (or use an online stock broking firm), they can arrange to sell the shares for you. Make sure you find out how much this will cost. You might also be able to sell through a share-dealing service offered by the company whose shares you own. Not all companies offer this service.

Giving away assets when there’s no tax to pay

Normally, if you give away something like an investment that you have made a profit on above your Capital Gains Tax allowance, you would have to pay this.

But you can transfer investments such as shares or investments, to your ex-partner during divorce or dissolution, without paying CGT.

To qualify for this exemption you must do it in the tax year (from 6 April to 5 April the following year) that you separate.

Your next step

Find out about a clean break or spousal maintenance in England, Northern Ireland or Wales, or a clean break or periodical allowance in Scotland as part of your divorce or dissolution financial settlement.

This article is provided by the Money Advice Service.

Some important information about Rest Less Money

We want you to understand the positives, but also the limitations of using our site. We operate in a journalistic manner and therefore all information, guidance or suggestions provided are intended to be general in nature, and you should not rely on any of the information on the site in connection with the making of any financial decision.

When we set out to build Rest Less Money, we wanted to be a trusted place where you could find helpful information about financial matters affecting the over 50s. As a free to use resource, we try hard to provide the best information we can, but we cannot guarantee that we won’t occasionally make mistakes. So please note that you use the information on our site at your own risk, and we can’t accept liability if things go wrong.

Key things to remember when using Rest Less Money:

We do not offer financial advice – As a journalistic site, it’s important to know that we do not provide financial advice. You should always do your own research before choosing any financial product so that you can be certain it is right for you and your specific circumstances. If you are in any doubt, please seek professional financial advice from a regulated financial advisor.

No Liability – please note that you use the information on Rest Less Money at your own risk and we can’t accept liability for how you choose to use the information given on our site. We will often provide links to content or products and services available on other third-party websites. These are provided purely for your convenience and we cannot be held responsible for any content, or any of the products and services offered on any website that we link to.

 

Accuracy of Information – We try to make sure that all the information provided on Rest Less Money is correct at the time of publishing as we want it to be the most helpful resource possible. Sadly, we are not perfect however, and so we can make no guarantees as to the completeness, accuracy, adequacy or suitability of the information available on the site.
Whilst we work hard to try and provide accurate information, deals and prices can change, so whilst they may be correct at the time of writing, providers may subsequently decide to alter them later – so always double check first.

A final note on the Rest Less Community Forums – always remember that anyone can post their opinion on the Rest Less Community Forums, so it can be very different from our own opinion and may not be factual or well researched. Always be wary of any content posted on the forums and be sure to do your own research and due diligence on anything suggested. 

We hope you find Rest Less Money a useful resource and we would welcome your feedback at [email protected] on how to make it even better. For more information on any of the above you can read our full terms and conditions.

Some important information about Rest Less Money

We want you to understand the positives, but also the limitations of using our site. We operate in a journalistic manner and therefore all information, guidance or suggestions provided are intended to be general in nature, and you should not rely on any of the information on the site in connection with the making of any financial decision.

When we set out to build Rest Less Money, we wanted to be a trusted place where you could find helpful information about financial matters affecting the over 50s. As a free to use resource, we try hard to provide the best information we can, but we cannot guarantee that we won’t occasionally make mistakes. So please note that you use the information on our site at your own risk, and we can’t accept liability if things go wrong.

Key things to remember when using Rest Less Money:

We do not offer financial advice – As a journalistic site, it’s important to know that we do not provide financial advice. You should always do your own research before choosing any financial product so that you can be certain it is right for you and your specific circumstances. If you are in any doubt, please seek professional financial advice from a regulated financial advisor.

No Liability – please note that you use the information on Rest Less Money at your own risk and we can’t accept liability for how you choose to use the information given on our site. We will often provide links to content or products and services available on other third-party websites. These are provided purely for your convenience and we cannot be held responsible for any content, or any of the products and services offered on any website that we link to.

 

Accuracy of Information – We try to make sure that all the information provided on Rest Less Money is correct at the time of publishing as we want it to be the most helpful resource possible. Sadly, we are not perfect however, and so we can make no guarantees as to the completeness, accuracy, adequacy or suitability of the information available on the site.
Whilst we work hard to try and provide accurate information, deals and prices can change, so whilst they may be correct at the time of writing, providers may subsequently decide to alter them later – so always double check first.

A final note on the Rest Less Community Forums – always remember that anyone can post their opinion on the Rest Less Community Forums, so it can be very different from our own opinion and may not be factual or well researched. Always be wary of any content posted on the forums and be sure to do your own research and due diligence on anything suggested. 

We hope you find Rest Less Money a useful resource and we would welcome your feedback at [email protected] on how to make it even better. For more information on any of the above you can read our full terms and conditions.

Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp
Share on email

Join Rest Less Money Club

Helpful tips and guidance for making the most of your money – straight to your inbox

By providing us your email address you agree to receive emails and communications from us and acknowledge that your personal data will be used in accordance with our Privacy Policy and Terms and Conditions. You can unsubscribe at any time by following the link in our emails.

Join the Rest Less Money Club

Helpful tips and guidance for making the most of your money – straight to your inbox

Good luck with your application

Before you go, we’d love to stay in touch to find out how you get on. Sign up to Rest Less today to get free job alerts and inspiring content sent straight to your inbox.
By providing your email you agree to receive emails and communications from us and acknowledge that your personal data will be used in accordance with our Privacy Policy and Terms and Conditions. You can unsubscribe at any time through the link in our emails.