Dividing investments and savings during divorce or dissolution

Investments and savings will generally form part of your financial settlement on divorce or dissolution. Dividing them should be relatively straightforward if you can negotiate with each other. But you may need to value them and pay tax or charges if you sell or transfer them or cash them in.

How investments and savings are treated

England, Wales or Northern Ireland

Investments and savings can be taken into account as part of your overall financial settlement.

But some assets might not be treated the same as others. For example, money or property you or your ex-partner (husband, wife or civil partner) inherited or owned before you married or entered into your civil partnership.

Scotland

Generally, only investments or savings you and your ex-partner have built up during your marriage or civil partnership are taken into account as ‘matrimonial property’.

But any increase in the value of investments or savings you or your ex-partner had before you got married or entered a civil partnership could be taken into account in some circumstances.

This can be a complicated area. If you’re in any doubt, it’s worth getting professional advice.

Dividing savings accounts

The process of separating your savings might be different, depending on the type of account you have and whose name it’s in.

You might have:

Cash ISAs

These can only be held in one person’s name – and not jointly.

If you want to give your ex-partner money from your cash ISA, you’d have to take out the money you want to give them.

You couldn’t transfer the money from your own ISA directly to theirs.

Savings accounts

These are more straightforward and you could simply transfer some money from your account to your ex-partner’s.

The only difficulty might be if the money is in a notice account. If that’s the case, you will have to ‘give notice’ and tell your bank or building society that you want to take out your money. If you don’t, you could lose some of the interest.

If the money is in a fixed-rate savings account, you might not be able to cash it in before the term is up. Even if you can, you might lose a lot of interest.

Investment property

When you know the result of your financial settlement, you’ll need to work out what you want to do with your investments. For example, whether you want to sell, continue owning, or rent out a buy-to-let property or a holiday home.

Contact your lender if you need to take your or your ex-partner’s name off the mortgage. If you think you’ll need to remortgage, it’s worth considering talking to a mortgage broker.

Valuing your investments

You should be sent a statement every year telling you how much your investments are worth.

But this might not be same as the amount you would get if you cashed in or transferred your investments.

Instead, depending on the type of investment, the value might be the:

  • transfer value, or
  • surrender value.

You first need to ask the investment company for an up-to-date valuation, or transfer or surrender value.

You might have:

  • bonds
  • investment bonds
  • stocks and shares ISAs
  • with-profits policies, such as an endowment
  • unit trusts, investment trusts or OEICS (open ended investment companies).

Understanding the costs of cashing in investments

Cashing in your investments might not be the best option, because you might have to pay tax and extra charges.

  • You might have to pay Capital Gains Tax (CGT) if you cash in or sell an investment and make a profit. You have an annual CGT allowance, which means you can make a certain amount of profit – after selling costs and fees are deducted – and not pay this tax.
  • You don’t have to pay CGT when you’re selling your main home or stocks and shares ISAs. This is a complicated area so it’s probably worth getting advice from an independent financial adviser or accountant. You’ll have to pay for their advice.
  • Depending on the investment you have, you might have to pay charges if you sell or cash it in early. Even if you don’t, you might lose out if you sell share-based investments when the stock market is low.

Transferring or selling shares you own

If you own shares, you can either transfer them to your ex-partner or sell them so you can give them the money instead.

It’s worth getting advice from an independent financial adviser or accountant about which is the best option.

  • You can transfer shares to your ex-partner by filling in and signing a ‘stock transfer form’ (also known as a ‘J30’ form). You might be able to download this from the website of the company you own shares in.
  • If you have a stockbroker (or use an online stock broking firm), they can arrange to sell the shares for you. Make sure you find out how much this will cost. You might also be able to sell through a share-dealing service offered by the company whose shares you own. Not all companies offer this service.

Giving away assets when there’s no tax to pay

Usually, if you give away something like an investment that you’ve made a profit on above your Capital Gains Tax allowance, you would have to pay this.

But you can transfer investments, such as shares or investments, to your ex-partner during divorce or dissolution, without paying CGT.

To qualify for this exemption, you must do it in the tax year – from 6 April to 5 April the following year – that you separate.

Your next step

Was this information useful?
Thank you for your feedback.
We’re always trying to improve our website and services, and your feedback helps us understand how we’re doing.
Looking for us? Now, we’re MoneyHelper

MoneyHelper is the new, easy way to get clear, free,
impartial help for all your money and pension choices.
Whatever your circumstances or plans, move forward with MoneyHelper.

Continue to website
Looking for us? Now, we’re MoneyHelper

MoneyHelper is the new, easy way to get clear, free,
impartial help for all your money and pension choices.
Whatever your circumstances or plans, move forward with MoneyHelper.

Continue to website
Looking for us? Now, we’re MoneyHelper

MoneyHelper is the new, easy way to get clear, free,
impartial help for all your money and pension choices.
Whatever your circumstances or plans, move forward with MoneyHelper.

Continue to website
Talk to us live for…
Talk to us live for…
Talk to us live for pensions guidance using…
Talk to us live for money guidance using…
0800 011 3797* Hours
  • Mon – Fri:9.00am – 5.00pm
  • Sat, Sun and bank holidays:Closed

* Calls are free. We’re committed to providing you with a quality service, so calls may be recorded or monitored for training purposes and to help us develop our services.

Talk to us live for money guidance using the telephone
0800 138 7777* Hours
  • Mon – Fri:8.00am – 6.00pm
  • Sat, Sun and bank holidays:Closed

* Calls are free. We’re committed to providing you with a quality service, so calls may be recorded or monitored for training purposes and to help us develop our services.

Talk to us live for pensions guidance using web chat
Hours
  • Mon – Fri:9.00am – 6.00pm
  • Sat, Sun and bank holidays:Closed
Talk to us live for money guidance using web chat
Hours
  • Mon – Fri:8.00am – 6.00pm
  • Sat:8.00am – 3.00pm
  • Sun and bank holidays:Closed
Talk to us for pensions guidance using our web form

We aim to respond within 5 working days

Talk to us for money guidance using our web form

We aim to respond within 2 working days

Talk to us live for money guidance using WhatsApp
+44 77 0134 2744

Download app: WhatsApp

For help sorting out your debts, credit questions or pensions guidance. For everything else please contact us via Webchat or Telephone.