How does the court treat stocks and shares on divorce?

How Are Stocks and Shares Treated in Divorce?

In UK divorce proceedings, stocks and shares are treated like any other financial asset. If they were acquired during the marriage, they are typically considered matrimonial property and subject to division. If acquired before the marriage or inherited, they may be considered non-matrimonial - but could still be included in the settlement if needed to meet the other party’s needs.

Matrimonial vs Non-Matrimonial Investments

• Matrimonial: Shares purchased or built up during the marriage, especially if used to support the family lifestyle.
• Non-Matrimonial: Shares acquired before the marriage or inherited, unless they were mixed with joint assets or used for family benefit.

Even non-matrimonial shares can be considered if the court deems it necessary to achieve fairness.

How Are Shares Divided in Divorce?

Once the court determines that shares are part of the matrimonial pot, there are several ways they can be dealt with:

1. Transfer of Shares: One party transfers shares to the other.
2. Sale and Division: Shares are sold and the proceeds split.
3. Offsetting: One party keeps the shares, and the other receives a different asset of equivalent value (e.g. more equity in the home).

The court will consider tax implications, liquidity, and the practicality of joint ownership post-divorce.

Valuing Stocks and Shares

Valuation depends on the type of shares:

• Quoted Shares: Publicly traded; value is based on the current market price.
• Unquoted Shares: In private companies; require expert valuation, often by a forensic accountant.
• Share Options: Rights to buy shares in the future; complex to value and often require specialist input.

The court may use the valuation date closest to the hearing or agreed separation date, depending on the circumstances.

FAQs: Stocks and Shares in Divorce

Q: Are shares considered matrimonial assets?

A: Yes, if acquired during the marriage. Pre-marital or inherited shares may be excluded unless needed to meet needs.

Q: Can I keep my shares after divorce?

A: Possibly. You may retain them through offsetting or by buying out your spouse’s share.

Q: How are private company shares valued?

A: Through expert valuation, considering company performance, market conditions, and shareholding rights.

Q: What if shares are in my name only?

A: Ownership title is less important than when and how the shares were acquired. The court looks at the broader financial picture.

Need Help with Investment Division in Divorce?

At Vardags, we specialise in high-value divorce cases involving complex financial assets, including shares, trusts, and investment portfolios. If you’re considering or going through a divorce and have stocks and shares involved, we can help. Click below for a free initial consultation with one of our expert divorce solicitors. 

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