How do we reach a FAIR financial outcome on divorce?
What does “Netting down” assets on divorce mean and why is this important ?
“Netting down” assets in divorce refers to calculating the value of assets to reflect any liabilities, taxes, costs and fees associated with a Sale or Transfer of the assets (even if a sale or transfer is not intended)—so that the final divorce division is based on their true net value rather than gross value.
For example, if the asset is simply a cash asset such as money in a Saving account there would be no adjustment calculation to make but what about assets like Properties, Pensions, Business interests and investments which attract Capital Gains Tax
When couples divorce, their assets—like property, pensions, savings, and investments—must all be disclosed and their value assessed for division. Chapter 7 – What is a ‘Full and Frank’ financial disclosure? – The Divorce Manual
Financial Disclosure Booklet
The Financial Booklet we provide requires the disclosure of all assets, liabilities, taxes, costs and fees associated with a potential sale or transfer of the asset.
- 🏠 Property: A house worth £500,000 with a £200,000 mortgage is “netted down” to £300,000. It is also necessary to include costs and fees connected with a Sale, even if it is not intended to sell the property
- 💼 Pensions: If one spouse has a pension pot, its value may be reduced to reflect tax liabilities upon withdrawal. Chapter 10 – How to treat pensions on divorce – The Divorce Manual
- 💰 Investments: Capital gains tax may apply when selling shares or property, so the net value is lower than the market value. Chapter 11 – How to treat businesses on divorce – The Divorce Manual
- 🧾 Debts: Any personal loans or credit card balances are subtracted from the total asset pool.
Can you do this yourself
This might sound a little complicated, but it does not have to be.
In our experience most financial situations are quite straightforward requiring little additional professional support.
We provide an embedded video to guide you through each part of our Financial Disclosure Booklet, explaining exactly what is required and how to go about obtaining and working this out.
We provide you with free access to our comprehensive Divorce Manual with its 16 Chapters, Resources including and over 140 video guides
You will also have access to one of our Mediators (all former lawyers) to guide you through this process, quickly showing you where to find answers to your questions
Finally, if needed we have a team of financial experts, specialist at helping and supporting you through this process, in a collaborative problem-solving way
Our aim is to help you get through the financial disclosure process as painlessly as possible at minimum costs.
Why it matters in divorce
- Fairness: Ensures a truly fair outcome based on a ‘true value’ of the assets.
- Avoids misleading valuations: Remember that a £100,000 pension is not the same as £100,000 cash (Divorce Manual- How to treat pensions on divorce).
- Court Consideration: The court will consider net values when assessing financial needs and entitlement.
If you want a fair financial outcome to your divorce and want to know how to go about this in the most cost effective way, please contact us
Contact Us – Compass Resolution