Division of Assets in Scotland

In Scotland only matrimonial property is capable of division in Scotland.

What is matrimonial property?

Matrimonial property is the net value of property belonging to you owned either individually or in joint names at the time you stop living together or start leading separate lives (if you stay in the same house) or raise proceedings for divorce (whichever is earlier).  This date is referred to as the “relevant date” or “date of separation”.

Matrimonial property needs to have been acquired during the marriage. Property you owned pre-marriage or acquired after the relevant date is not matrimonial property with the exception of any house or furniture you bought pre-marriage to use or live in as a family home. Gifts from third parties are not matrimonial property and money you have inherited is also exempt.  All property acquired during the marriage is matrimonial and it doesn’t matter who acquired it. This includes any business interests, pensions and life policies.

All debt acquired during the marriage is also matrimonial and again it doesn’t matter who acquired it or in whose name it is in.

The question of whether or not a particular asset is matrimonial property is sometimes open to interpretation. The above is a basic overview; however, it is always best to seek advice. Sometimes assets that you don’t think are matrimonial such as redundancy/ accident payments which are paid after the relevant date may in fact constitute matrimonial property.

How much matrimonial property are you likely to get?

The law in Scotland is governed by two Acts- The Family Law (Scotland) Act 1985, and The Family Law (Scotland) Act 2006. Scots law encourages the “clean break” principle. Lump sum payments, known as capital sums, pension sharing orders and property transfer orders tend to be made and ongoing support following divorce is generally only awarded for a short period of time after divorce, if at all.

The basic principle is that the net value of the matrimonial property should be shared fairly between you. “Fairly” usually means equally although there are arguments that can be advanced to tip the balance slightly.

Examples where division might be unequal in favour of one of you could be: –

• One party gave up their career in order to further their spouse’s career.
• One party gave up work to look after children.
• An unequal division would allow a family home to be retained for children to live in.
• One of you is unable to work due to age, lack of skills for today’s job market and/or poor health.
• If business assets owned pre -marriage by one party have increased significantly during the marriage because of direct or indirect efforts, of the other party.

Any of these factors or even better a combination of a few of them would mean that we could advance an argument for “unequal division” however just because you have a stateable argument this is by no means guaranteed. The court may also elect to address any imbalance by awarding spousal support known as “periodical allowance” for a finite period instead.

SPOUSAL SUPPORT – ALIMENT AND PERIODICAL ALLOWANCE

ALIMENT- REGULAR PAYMENTS PRE-DIVORCE

Husbands and wives/civil partners have a legal duty to financially support one another.  This duty continues in the form of aliment after separation until divorced or the civil partnership is dissolved.  Aliment normally arises in situations where one party has been the main earner and therefore supported the other during the marriage/civil partnership.  This support can be fundamentally important where the parties decide to live separately after separation and one party will struggle to cope with the financial burden. If agreed or granted by the Court, it is usually paid in regular monthly amounts. Regard is had to:

• The parties’ needs and resources;
• The parties’ earning capacities; and
• All the circumstances of the case.

The duty to pay aliment ends on divorce or earlier if mutually agreed.

PERIODICAL ALLOWANCE- REGULAR PAYMENTS POST DIVORCE

It is far less common to be awarded a periodical allowance. The law in Scotland favours a “clean break” The party seeking it will need to show that the financial settlement reached upon separation still leaves them in a situation where after divorce/ dissolution they are still struggling to adjust to the loss of support previously given.   There are a number of factors to be considered when determining if a periodical allowance is payable and this will wholly depend on the parties’ circumstances.  These factors go way beyond those considered for aliment.  Any award of a periodical allowance will end three years after the date of divorce/ dissolution however awards of up to a year or eighteen months are far more common.