Division of Matrimonial Property in Scotland
Contents
- What Is Matrimonial Property?
- The Relevant Date
- The Presumption of Fair Sharing
- Special Circumstances
- Pensions as Matrimonial Property
- Business Assets and Valuations
- Capital Sums and Property Transfers
- Periodical Allowances
- Financial Disclosure
- Common Disputes
- Hidden or Dissipated Assets
- Handling of Debts
- When One Spouse Earns More
- Asset Valuation
- Real-World Examples
- What If You Cannot Agree?
- Do’s and Don’ts
- Checklist for Preparing
- Frequently Asked Questions
- Why Choose Rooney Family Law?
When a marriage ends in Scotland, one of the most significant legal and emotional challenges is dividing the financial assets fairly. This legal process is known as the division of matrimonial property and is governed by the Family Law (Scotland) Act 1985.
The legislation provides a principled framework to help couples reach a just financial settlement, either by negotiation or, if necessary, through the courts. Understanding what is considered matrimonial property, how it is valued, and how it is divided is essential for anyone separating or divorcing in Scotland.
What Is Matrimonial Property?
Matrimonial property refers to the assets and liabilities accumulated by either spouse or both together during the marriage. It generally includes all property acquired between the date of marriage and the relevant date (usually the date of separation). Common examples include:
- The family home (if purchased after the marriage)
- Savings and investments built up during the marriage
- Pensions accrued from the date of marriage to separation
- Vehicles, household items, and valuables acquired during the marriage
- Shares and business interests acquired during the marriage
However, property acquired before the marriage or after separation is usually excluded, unless it was intended for family use. Inheritances or gifts from third parties are also excluded, unless special circumstances apply that justify their inclusion in the division.
The Relevant Date
The “relevant date” is the legal cut-off point for identifying and valuing matrimonial property. It is defined in section 10(3) of the Family Law (Scotland) Act 1985 and is either:
- The date on which the couple ceased to cohabit, or
- The date of service of the summons in the divorce action
This date is pivotal because only assets and debts that exist as at this date fall within the matrimonial property pool. Accurate valuations are required as at this date, not before or after. Disagreements about the relevant date can delay settlement and increase legal costs.
The Presumption of Fair Sharing
Scottish law starts with a presumption that matrimonial property should be shared equally between spouses. However, fairness is the overriding principle — and in some cases, fair does not mean equal. Section 9 of the Act outlines five principles the court must consider:
- Fair sharing of matrimonial property
- Fair account of economic advantage and disadvantage
- Relief from financial hardship post-divorce
- Support for children under 16
- Compensation for financial dependence
These principles allow the court to depart from an equal division if it is justified based on the facts of the case. For example, one spouse may have brought significantly greater assets into the marriage, or given up career prospects to support the other or care for children.
Special Circumstances
Section 10(6) of the Act recognises that special circumstances may justify unequal division. These include:
- Use of non-matrimonial property (e.g. inheritance) to acquire or improve matrimonial assets
- Property held in the sole name of one spouse
- Business interests established or grown during the marriage with unequal contributions
- Significant gifts between spouses or from third parties
- Destruction or disposal of property by one spouse
The spouse seeking a departure from equal sharing must provide credible evidence and a persuasive legal argument. Without this, the default position of equal sharing will apply.
Pensions as Matrimonial Property
Pensions often form a substantial part of the matrimonial property. Only the value built up between the date of marriage and the relevant date is included. There are three ways pensions can be dealt with:
- Pension sharing order: Divides the pension fund itself
- Pension offsetting: One spouse keeps the pension and the other receives a greater share of other assets
- Capital sum: Paid to reflect pension value without touching the fund itself
Accurate CETVs (Cash Equivalent Transfer Values) are required as at the relevant date. Apportionment may be necessary if part of the pension accrued before marriage or after separation. Complex pensions — such as defined benefit schemes, police/fire pensions, or international pensions — may require actuarial input.
See our Pensions and Divorce page for more detail on CETVs and apportionment.
Business Assets and Valuations
When a spouse owns a business, part or all of that interest may be matrimonial property. The court will consider:
- When and how the business was acquired
- Whether any value increase occurred during the marriage
- Whether the other spouse contributed to the business
- The value and liquidity of the business
Independent valuation is usually required. The court aims to avoid disrupting the business while ensuring a fair outcome. Creative solutions such as deferred payments, discounts for illiquidity, or retention of shares may be used.
Capital Sums and Property Transfers
Under section 8(1), the court has wide powers to make financial orders to achieve fairness. These include:
- Payment of a lump sum (capital sum)
- Transfer of property (such as the family home)
- Ongoing payments (periodical allowance)
- Pension sharing orders
Often, a combination of orders is used. For example, one party might keep the house and pay a capital sum to the other, or transfer part of a pension in exchange for retaining savings. The payment schedule can be tailored, but the amount is fixed and not revisited unless appealed.
Periodical Allowances
These are typically used where a clean break is not immediately possible. They are most often awarded:
- To ease a transition where one party has no immediate income
- Where capital division does not meet short-term needs
- To assist with childcare costs
They are usually time-limited (normally not exceeding three years) and cease on remarriage or death. The amount and duration depend on financial needs and earning potential.
Financial Disclosure
Before any meaningful negotiation can take place, both parties must provide full and frank financial disclosure. This includes:
- Up-to-date bank statements
- Loan and credit card balances
- Mortgage statements and title deeds
- Pension CETVs
- Business accounts, share certificates or company valuations
Failure to disclose may lead to court sanctions, delays, or an order being revisited later. Transparency is not only a legal obligation but is essential for building trust and resolving matters amicably.
Common Disputes
Financial settlements frequently involve disagreement. Common issues include:
- Whether an asset is matrimonial or not
- What values should be applied (e.g. for property or pensions)
- How to deal with business assets or jointly held shares
- Concerns over hidden assets or income
- Responsibility for debts or credit cards
These issues can often be resolved through solicitor negotiation, mediation, or collaborative law. If not, they may require litigation.
Hidden or Dissipated Assets
Where one party has deliberately hidden, transferred or dissipated assets, the court may:
- Reverse suspicious transfers
- Add back the value of dissipated assets
- Draw adverse inferences against the party at fault
Courts take a dim view of dishonest conduct. Early legal advice and forensic accounting can be vital in such cases.
Handling of Debts
Debts are part of the matrimonial property if:
- They were incurred between the date of marriage and the relevant date
- They were for joint benefit (e.g. mortgage, car finance, household improvements)
Debts taken out for personal use (e.g. gambling or secret spending) may be excluded. Documentation is key in proving the nature and purpose of debts.
When One Spouse Earns More
The law aims to help both spouses become financially independent, even if one earns significantly more. Section 9(1)(c) allows the court to order a capital sum or short-term support to reduce hardship. However, the law does not aim to equalise income post-divorce — only to create a fair starting point for each party to move forward.
Asset Valuation
Property and assets must be valued as at the relevant date. Credible valuations should come from:
- Surveyors or estate agents for heritable property
- Independent actuaries for pensions
- Accountants for businesses or complex investments
Disputes often arise when one party uses outdated, inflated, or speculative valuations. Professional reports reduce the risk of disagreement and litigation.
Real-World Examples
Example 1: Pre-marital Home
Claire bought a flat five years before marriage. It became the family home. Even though the flat is excluded from matrimonial property, its use during the marriage and any increase in value may be considered under special circumstances.
Example 2: Inheritance Used for House Deposit
Mark inherited £200,000 and used it as a deposit for a jointly owned matrimonial home. Although the home is matrimonial property, the inheritance may justify him receiving a larger share of the equity.
Example 3: Business Built During Marriage
Laura started a marketing agency during the marriage, using joint savings. Her spouse stayed home to raise their children. The value of the business is matrimonial property, and her spouse may be entitled to a share based on financial and non-financial contributions.
What If You Cannot Agree?
If agreement is not possible, a court action may be necessary. The court will:
- Determine the relevant date
- Identify what is and is not matrimonial property
- Value the assets and debts
- Apply the section 9 principles
- Make enforceable financial orders
Litigation should be a last resort. It is expensive, time-consuming, and emotionally draining. However, it is sometimes the only option where one party is obstructive, dishonest, or unreasonable.
Do’s and Don’ts
Do:
- Seek early legal advice
- Be honest and transparent about finances
- Get professional valuations
- Document all contributions clearly
Do not:
- Hide or transfer assets
- Rely on informal agreements without legal advice
- Assume 50/50 applies in every case
Checklist for Preparing
- ✔️ Identify the relevant date
- ✔️ Prepare a full list of assets and debts
- ✔️ Obtain up-to-date valuations
- ✔️ Gather evidence of contributions or special circumstances
- ✔️ Take solicitor advice before finalising any agreement
Frequently Asked Questions
Do we have to split everything 50/50?
No. Equal division is a starting point, but special circumstances may justify something different.
Is my pension included?
Yes, but only the value accrued between marriage and separation.
Can we agree without going to court?
Yes. Most cases are resolved through negotiation and a formal Separation Agreement.
What if my spouse refuses to disclose finances?
The court can compel disclosure and draw adverse inferences if they do not comply.
Can I keep the house?
It depends on your financial position, any children involved, and how fairness can be achieved.
How long does this take?
Negotiated cases may resolve within weeks. Court actions may take many months or more.
How much will it cost?
We offer tailored advice on likely costs. Negotiation is generally far more cost-effective than court.
Is legal aid available?
In some circumstances, yes. We can assess your eligibility and discuss funding options.
Why Choose Rooney Family Law?
We are specialist family law solicitors helping clients across Scotland navigate complex financial separations with clarity, compassion, and strategic advice. Whether you are trying to reach agreement or heading to court, we will guide you at every stage. Book a confidential consultation today and take the first step towards securing your future.