Dividing investments and savings when you separate should be straightforward if you’re not married or in a civil partnership. You might be able to claim back your contributions to them. You might also need to value them and pay tax or charges if you sell or cash them in.
How investments and savings are treated
Generally, any investments or savings in your sole name belong to you alone. And any owned in your ex-partner’s sole name belong to them alone.
For example, if you've contributed towards their solely owned assets, you might be able to make a claim for a share (and vice versa).
If you want to do this, you need to act quickly and get advice from a solicitor who specialises in family law.
In England and Wales, you need to show you had a ‘beneficial interest’ in your ex-partner’s investments or savings.
In Scotland, you need to show:
- you’ve suffered what’s called ‘economic disadvantage’ – are financially worse off, or
- your ex-partner has gained an ‘economic advantage’ as a result of the relationship.
You have one year to make a claim from the date of your separation.
Making a claim might be expensive, so it’s worth getting legal advice before you begin any court action.
You might also need to arrange for any investments to be valued.
Find our more in our guide:
Renting: protect your rights to your home during separation if you were living together
Dividing savings accounts
If you’ve agreed how you’ll share money you’ve saved in your own or joint names, it’s important to understand your options for doing this when you separate.
The process might be different – depending on the type of account you have and whose name it’s in.
You might have the following:
Cash ISAs or Lifetime ISAs
These can only be held in one person’s name – and not jointly.
If you want to give your partner money from your Cash ISA, you’d have to take the money out of the ISA. You can't transfer it from your own ISA account directly to theirs.
With a Lifetime ISA (LISA), you could take out the money you need but you’ll have to pay a withdrawal charge. As with a Cash ISA, you couldn’t transfer money in your LISA to someone else’s.
Savings accounts and NS&I
These savings accounts are more straightforward as you could just transfer some money from your account to your ex-partner’s.
The only difficulty might be if the money is in an account where you have to give notice. If that’s the case, talk to your bank or building society to understand your options 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.
Some National Savings & Investments (NS&I) savings accounts allow instant access to your cash, while there might be a charge if you wanted to cash in a fixed-term bond early.
Junior ISAs
If you've opened a Junior ISA account for your child, then this money will be in your child’s name, and belong to your child.
But the savings held in your child’s name might be included in your joint financial assets. For example, if one parent moves money from their own account into your child’s account in order to try and exclude the funds from any financial settlement.
How to divide investment property
An investment property – such as a buy-to-let property or a holiday home – owned in your name or your partner’s name alone belongs to that person. This is unless you can show you’ve made contributions towards it.
Try to negotiate – maybe through mediation – how these contributions will be paid back. Otherwise, it’s worth getting legal advice to assess your claim.
If you or your ex-partner own an investment property jointly, you’ll need to get it valued. This will help you both work out whether you want to sell it or to continue owning or renting it out.
Contact your lender if you want to take your or your ex-partner’s name off the mortgage. And consider talking to a mortgage broker/adviser if you think you’ll need to remortgage.
Find out more in our guide Remortgaging to get the best deal
But bear in mind rules that lenders must consider when assessing whether you or your ex-partner can afford a new mortgage.
Find out more in our guide Buying a home - what mortgage can I afford?
Valuing your investments
If you have investments, you should get a statement every year telling you how much they’re 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 (cash-in) value.
Your first step should be 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 – before you have to pay tax. You don’t have to pay this tax if you’re selling your main home or on 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 your investment, you might have to pay charges if you sell or cash it in early. Even if you don’t have to pay a charge, you might lose out if you sell share-based investments when the stock market is low.
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If you own shares, you can either transfer them to your ex-partner or sell them so you can give your ex-partner 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. Your ex-partner might have to pay Stamp Duty.
- If you have a stockbroker – or use an online stockbroking 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 you own shares in. Not all companies offer this service.
Giving away assets to your ex-partner
If you give away an asset – for example, an investment that you have made a profit on – you might have to pay CGT.
Married couples and those in a civil partnership who separate can give away assets to their ex-partner without having to pay CGT.
But couples who live together without marrying or entering a civil partnership and then split up can’t do this.
