Are Gifts Matrimonial Assets in Divorce?

How Are Gifts Treated in Divorce?

In UK divorce law, gifts can be either matrimonial or non-matrimonial assets depending on their source, purpose, and how they were used during the marriage. This classification plays a key role in determining whether a gift is included in the financial settlement.

Gifts Between Spouses

Gifts exchanged between spouses - such as jewellery, cars, or even engagement rings - are usually considered matrimonial assets. These are typically included in the financial settlement, especially if they are of significant value or were used jointly.

• Engagement rings are presumed to be absolute gifts under Section 3(2) of the Law Reform (Miscellaneous Provisions) Act 1970, unless there is evidence to the contrary (e.g. a condition to return it upon separation).

Gifts from Third Parties

Gifts from parents, friends, or other third parties are more nuanced:

• Gifts to the couple (e.g. a deposit for a home) are usually matrimonial.
• Gifts to one spouse only (e.g. a personal inheritance or a car from a parent) are generally non-matrimonial.

However, even non-matrimonial gifts can become matrimonialised if they are used for joint purposes, such as paying off a mortgage or funding family expenses.

Gift or Loan?

It’s common for disputes to arise over whether money received from family was a gift or a loan. This distinction is critical because gifts may be included in the matrimonial pot and loans may be deducted from the asset pool (if proven).

Courts will look at:

• Written agreements
• Repayment history
• The intention of the giver
• Whether the money was treated as repayable

Need Advice on Gifts and Divorce?

At Vardags, we specialise in complex financial cases involving gifts, loans, and inherited wealth. Our expert team can help you protect your interests and clarify your position. Book your free consultation with one of our leading divorce solicitors today.

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