The First-tier Tribunal (FTT) has found that a repayment of Income Tax due to a taxpayer who had died during the relevant tax year formed part of her estate for Inheritance Tax (IHT) purposes. The taxpayer had died on 18 December 2020. Her son, who was...
Does a Divorce dismiss any financial claims my spouse can make against me as a result of our marriage?
Divorce is a major decision and life event. It is understandable that separated couples want to move quickly to close the chapter.
Separated couples are now able to get divorced online via the government’s online divorce portal which has simplified the process to enable couples to deal with the divorce element of their separation themselves. However, though this system allows separated couples to have control of their divorce, many are unknowingly finalising their divorce without agreeing and obtaining a financial consent order. Many couples believe that once they are divorced, the finances are automatically dealt with; this simply isn’t the case.
A financial order is a legal document that details how a couple’s finances are going to be divided following a divorce. The financial consent order deals with assets such as property, pensions, savings, debts and spousal maintenance. Importantly, a financial order can dismiss all claims that a spouse has against the other arising from their marriage.
Without a legally binding financial consent order approved by the Court, either party may come back and make a financial claim against the other. Both verbal and informal agreements/arrangements are not legally binding (only a Court approved financial consent order can provide certainty of an agreement and if breached, enforceability of said agreement).
It is strongly advisable that a financial consent order is drafted by a solicitor. This is to ensure that the order is drafted properly and to prevent the order being rejected by the Court (which will then incur further time and costs in resolving). It should be noted that one of the most valuable aspects of a financial consent order is achieving a clean break, ensuring that neither party is able to make further claims once the agreement has been approved and sealed by the Court. Without this, the separated couple will remain financially linked and irrespective of the passage of time can make a financial claim at a future date.