Asset splitting is an important consideration within any divorce proceedings. It is important to address the different types of assets being divided in order to ensure a fair and workable split of any sources of income. There is little point in a party walking away with valuable but illiquid assets that do not generate income as they will soon experience financial difficulty. We can assist in proceedings by reviewing assets held to ensure that divisions are fair, can provide income and, where necessary, a clean break.

The most complex consideration in the context of asset splitting is taxation. The implications of different asset division structures and the order and timing of events can have a significant impact on the amount of tax payable and thus on the value of post-tax assets.

We work closely with our Tax advisory team to ensure that expert advice is given on asset splitting to maximise the use of available allowances and to find a tax efficient solution within proceedings. We are regularly asked to advise on the structure of settlement agreements focusing primarily on the tax implications and wording of the agreement. Following a divorce or separation we can also provide ongoing advice to ensure that your affairs are tax efficient and in order going forward.

Case examples:

Tax on the sale or transfer of shares

Appointed as single joint expert to value a facilities management company owned largely as a joint shareholding by the husband and wife. Instructed to comment on the taxation implications of a sale or transfer of shares and of funds withdrawn by the husband to finance a house purchase as well as the most tax efficient means of extracting value from the companies.

Tax on the disposal of property

Appointed as single joint expert to value a property development company owned jointly by the couple. Also instructed to comment on the taxation implications of a sale or transfer of shares and of the disposal of the redeveloped matrimonial home.

Tax efficient method of sharing business assets

Appointed as single joint expert in matrimonial proceedings to value a high end restaurant business jointly owned by the couple and a gastropub owned by the parties in conjunction with another couple. The companies also owned property used for staff accommodation. We were also instructed to consider the taxation implications of a sale or transfer of shares and to advise on the most tax efficient method of sharing the business assets between the parties.

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