Both parties reclaimed against the Lord Ordinary’s decision on financial provision. The Inner House upheld the transfer of property in principle, recalled the capital sum ordered against the wife, and reversed the direction in which payment flows between the parties.
Background
The parties married in 2014 and separated on 5 February 2019, the relevant date for the purposes of the Family Law (Scotland) Act 1985. A third party, the minuter, had made a secured loan to the wife. The husband’s application to set aside that loan and the standard security was refused at first instance, and he also reclaimed against the award of expenses made in the minuter’s favour.
At first instance (F v F and A [2025] CSOH 99, Lord Stuart, 24 October 2025) the court ordered transfer of the wife’s interest in the property referred to as 13b to the husband, together with payment of a capital sum of £30,000 by the wife to the husband. The Lord Ordinary had excluded from the matrimonial property the marriage-attributable value of the husband’s director’s loan account, treated £45,000 of that account as inherited funds lent to the company, and made an adjustment in the husband’s favour in respect of a retained investment bond segment.
The decision
The transfer of property order was upheld in principle. The Inner House was satisfied that the decision to transfer the wife’s interest in 13b to the husband was the correct one.
The capital sum of £30,000 was recalled. The court found no proper basis for finding the wife liable to make that payment. It contributed, in the context of the Lord Ordinary’s broader approach to the matrimonial property and its division, to a significant imbalance between husband and wife. The Lord Ordinary had found that the wife received Universal Credit of £995 per month and had more than £261,850 of equity in the home in which she lives. Even if it were reasonable to expect her to release equity, her limited income would not permit her to borrow. The child of the marriage under the age of 16 resides with her, and nothing in the Lord Ordinary’s opinion supported requiring her to sell that home.
The husband’s cross-appeal was rejected. It followed from the recall that his arguments for a larger capital sum, and for incidental orders to facilitate payment, could not succeed.
The court did not adhere fully to the approach taken to the investment bond. With the £30,000 removed, and on the basis that the wife was discharged from her liabilities under the standard security, the division at relevant date values would leave the husband with £85,787.25 and the wife with £54,614.67 before any adjustment for the bond. That recognised the husband assuming sole liability for the whole mortgage borrowing, but the departure from equal sharing remained marked within a modest body of matrimonial property. A balancing payment to achieve equal sharing would have been £15,586.29; on a broad approach the court assessed £10,000 as appropriate.
Section 10(3A) was applied to the transferred property. The wife’s share in 13b had increased in value by £7,500 since the relevant date, and it is the current value of an asset that is used for the purposes of a transfer of property order.
The result: the husband was ordered to pay a capital sum of £17,500 to the wife.
Why this decision matters
Excluding assets from the matrimonial property is only part of the exercise. The court stands back and considers the overall division, and a series of individually defensible adjustments can combine to produce an imbalance that the appeal court will correct.
Resources under section 8(2) are assessed practically. Equity in a home occupied with a child, held by a party on limited income who cannot borrow against it, is not a fund from which a capital sum will be ordered.
Where property is transferred rather than sold, section 10(3A) directs the court to current value rather than relevant date value. Here that operated against the transferee.
Legal review: Brian Rooney, Managing Partner and Law Society of Scotland Accredited Specialist in Family Law.