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Counting the cost of separation

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Divorce and the family home

The decision to permanently separate can be stressful enough, but the additional financial worries that come with it can make an already difficult time worse. 

There will always be costs when making life changing decisions - whether emotional, practical or financial - but there is a growing feeling that as the number of couples choosing to separate increases, so does the desire to raise valuable revenue, with what some describe as ‘hidden taxes on the separating’.

The court fee for a divorce or dissolution of a civil partnership is on the increase.  

Only last month, with mere days’ notice, it was announced that the petition fee of £410 would rise to £550; meaning that those who couldn’t get their paperwork into court before the deadline were faced with an additional cost of £140 as a result of the new fee coming in. Many in our profession who would not be surprised to see it rise again – to as much as £750 according to a recent government consultation.

So, are separating couples an easy target to raise revenue through the courts? 

Many are concerned that the court fee alone could prove too steep for many, meaning some separating couples are ‘priced out’ of the process. There is, of course, still help for those on low incomes – the court can assess whether the parties should be exempt from some or all of the fee, if an application for assistance is made. Even so, few ultimately qualify.

For the majority, however, who fund their own case, there remains the choice of whether to proceed without legal advice or representation - meaning the cost is limited to payment of the court fee - or whether to choose what many would suggest is the “safer” option - putting the case into the hands of the professionals.  In addition to the court fee, there is the added cost of having someone do the job for you. This may well be money well spent. It will avoid a great deal of the stress and avoids costly mistakes which can create delays. Figures show that there are a significant number of petitions returned due to errors in drafting. 

While some may recoil at the thought of solicitors’ fees, the good news is that if the case is not contested by the other party, a ‘fixed fee’ would allow the parties to keep control of the finances. Watch out though – we see many adverts for fixed fees which don’t include the court fee – only the cost of the job - so there could be a bit of a shock when you learn the true cost which could at least double with the court fee added in!  Equally, some seem unaware that the court fee has increased at all!

Recent changes in the law could add further financial pressure. On 1 April a 3 per cent surcharge on stamp duty land tax was introduced for people buying a second home or a “buy to let” property.  This is likely to hit you if you are looking for a release from your joint mortgage on the family home, to enable the purchase of a new property, when you separate.  If you purchase the property before your ‘legal separation’ is declared, you could receive a nasty bill.

Some protection can be provided by a formal ‘Separation Agreement’ which will record your separation and what you have agreed to do with your assets. Or, alternatively, if proceedings have already taken place, a ‘Financial Remedy Order’, setting out your settlement terms.  Both options would need to be in place before any property transaction takes place to give protection from the additional duty.

In any case, whatever financial complications might await you, my advice is that you need some advice!  We know from experience that a fixed fee meeting with an experienced family solicitor can be a shrewd investment ahead of any proceedings and will give you a practical plan to move forward.

By family and divorce solicitor, Mandy Rimmer