When couples divorce, a common issue is how to divide the assets of the marriage. Noelle Heath, Head of Family Law and partner at Morrish Solicitors discusses items that can often be overlooked.

Heath says: “Certain assets are clear and are always considered by the separating couple such as the family home or any or savings and investments. Often overlooked however are other assets owned by either party which should always be considered when considering how to divide the assets.”

Mind your business

Businesses are considered by the court to be a resource of one or both of the parties under the Matrimonial Causes Act 1973. Heath adds: “The existence and value of a business needs to be considered by the separating couple as they will be dealt with in financial remedy proceedings”. When considering a fair outcome in any settlement discussions or court proceedings, it is important to establish the value of the business before being able to decide how the asset will be treated in any eventual settlement.

What’s it worth?

In many cases professional valuations are necessary. However, professional valuations are expensive and are not always essential. Heath continues: “As a general rule of thumb, sole traders, cash businesses, minority shareholders in FTSE quoted companies and businesses that generally yield income only may not justify the costs of the valuation report when set against the value of that business to the court.”

If you are ever in doubt, then it is always worth asking a forensic accountant whether there is any merit in valuing a business and an individual’s interest in that business.

Bradford Telegraph and Argus: Noelle Heath, Head of Family Law and partner at Morrish Solicitors.Noelle Heath, Head of Family Law and partner at Morrish Solicitors. (Image: Morrish Solicitors)

Cryptocurrency

In 2023 around 3.3 million people in the UK invested in assets with cryptocurrencies and they are increasingly forming part of people’s assets. They are therefore likely to become more commonplace in divorce proceedings. Heath comments: “As family lawyers, we have had to develop an understanding of the issues surrounding the disclosure value and division of crypto assets. Cryptocurrencies will be recognised by the courts as ‘property’. This means that they can be transferred between divorcing couples via orders made by the family court, as long as they are capable of being transferred.”

Crypto assets vs regular assets

Crypto assets, like any other asset in divorce proceedings, will be considered depending on the specific circumstances of a couple’s family and financial life. HMRC considers cryptocurrency to be a taxable asset, so it is important also to consider any tax consequences respect of a financial settlement dealing with crypto assets. Heath continues: “One issue we regularly see with cryptocurrency is the issue of how to identify them and how to value them. Cryptocurrencies are often held in digital wallets and there is no personal information associated with them at all.”

Disclosing crypto assets

The separating couple is under a duty to provide full and frank disclosure of all their assets. If one fails to disclose crypto assets, it may be only become obvious from their disclosed bank statements as there are likely to be transactions to cryptocurrency exchanges. Heath adds: “Family lawyers often study an individual’s tax returns to see if whether there is any evidence within it to show that they may have cashed in crypto holdings.” 

A volatile market

It is important to realise that the value of cryptocurrency can be highly volatile and market dependent. Their value can fluctuate hugely from week to week. Cryptocurrency experts may need to be instructed if a couple is struggling to value a holding accordingly. Heath concludes: “Due to volatility in their value, cryptocurrencies will be considered riskier assets in divorce. In which case a judge might consider it appropriate that both spouses share the risk by receiving some of these assets.

To find out more about dividing assets or any of Morrish Solicitors’ family law services, see their website, call 033 3344 9600 or email info@morrishsolicitors.com.

Or contact Noelle Heath, Head of Family Law at Morrish Solicitors, here.

Alternatively, you can make an appointment at their office in Bradford city centre head office in Leeds city centre, or one of the branches located at 51a High Street in Yeadon and at 9 Lowtown in Pudsey.