A complication which may arise when one of the parties is to remain in the home is that the mortgage may be in joint names. This might mean that the person that has moved out may be unable to get a mortgage on their new home. Often the problem is overcome by releasing that person from the mortgage but allowing them to retain a share in the value of the house. This would be secured by a legal charge, often until the children have finished school or University.
If the house is in the sole name of one of the parties, the other should quickly file at the land Registry a Notice of Home Rights. This will prevent the owner from selling the property without their knowledge or approval.
Another complication relates to the “principal private residence relief” from capital gains tax to which the home owners are entitled. If a home owner were to move out of the marital home into a different residence as a result of separation or divorce. They might still qualify for the full relief. Even if they did not occupy the home for the whole of their period of ownership. If the property has been the only or main home of the owner at some time during their ownership, H M Revenue and Customs (HMRC) would assume that the home owner had lived in the home for the final eighteen months of ownership regardless of whether they actually lived there during that time.
HMRC might suspect that the move out of the matrimonial home was only temporary. Consequently the relief should not be available. In order to avoid this possibility, solicitors advise that notification of the address of the new home should be given to HMRC, banks, mortgage lenders, insurers and local authority. This evidence should be retained to show that the new home is the principal private residence. Invitations to the house warming party and phots of the event.
It is important that information provided by both parties to the matrimonial breakdown should be consistent.
As you can see from the above which is for guidance only, divorcing is never straight forward. Engaging a solicitor that specialise in divorce is always recommended before taking any action. Many individuals going through a divorce will benefit from the guidance of a trusted financial adviser. The financial adviser can provide a well-informed overview of the available options open to them.
Understandably the focus for many legal and financial advisers in on the procedural and technical aspect of family law. Looking at it as it applies to their clients. Yet statue and case law do not provide then full picture. A key consideration that is often overlooked is that divorce can be a positive experience. Providing individuals with an opportunity to consider the necessities. To priorities and look at their long term goals that will support them as they move forward into a new phase of their lives.
Our team of expert financial adviser can help with the valuation of pensions and investments. Assistance can also be given with sourcing new mortgage arrangements. At Anstee & Co we are independent financial advisers (IFA’s). Our financial advice is unbiased.
We have offices in Stamford, Kettering and London. Our financial adviser cover Lincolnshire, Northamptonshire, Bedfordshire and Warwickshire. We also make use of meeting rooms in Bedford, Northampton, Wellingborough and Towcester.
Meetings can also be arranged at your home at a time that is convenient to you. Why not contact us today to see how we can help.