With January typically seeing a spike in divorces, award-winning Cumbrian accountants, Lamont Pridmore, is offering financial advice to couples deciding to split.
Family lawyers report a rise in divorce enquiries at this time of year and, given the family and financial challenges of the pandemic, there is evidence to suggest that divorce rates are likely to increase in 2022.
As well as dealing with the emotional impact of a relationship breakdown, divorcing couples also need to resolve complex issues surrounding their finances, including pension funds, the sale or transfer of the family home, the sale or division of other properties and investments and the payment of maintenance.
On top of that, the average divorce in the UK is thought to cost around £14,500 plus VAT, with some solicitors charging up to £400 per hour for advice.
Graham Lamont, Chief Executive at Lamont Pridmore, said: “There is a growing need for guidance and advice on the separation of family wealth.
“The divorce process can be costly both in terms of legal fees and fees associated with the sale or transfer of the family home, and the sale or transfer of other properties or investments. There are also potential tax pitfalls along the way that couples need to be aware of to ensure they are able to secure their fair share of assets after taxation.”
Graham added that with reforms to divorce from 6 April, which will remove much of the blame commonly associated with separation, more couples may look to make a clean split, but this could leave some partners exposed.
The no-fault divorce rules have been a long time in the making and remove the need to provide one of five clearly defined grounds for divorce. Instead, it only needs to be found that the marriage has irretrievably broken down.
The new ‘no fault’ rules will make it possible for one party to launch a petition without the approval of the other party, where it can be shown that the marriage is no longer feasible.
Chris Lamont, a Partner at Lamont Pridmore, added: “The reforms, while welcome, could leave some individuals exposed new financial and taxation challenges.
“It is hoped that the new system may lower the costs of divorces. Allowing the couples to separate with minimal of legal costs from a solicitor and without the need to go to court.
“Nevertheless, divorces are never simple, especially when it comes to the division of wealth, pensions, homes and the ongoing requirements for maintenance, as well as possible tax implications.”
To help individuals navigate this minefield of financial difficulties, Lamont Pridmore has published a short online guide to the potential costs and often unforeseen consequences of divorce, which can be accessed by clicking here.
To find out more about our tax, accounting and business advisory services, please contact us.
