Family – Does cohabitation with a new partner have an impact on Divorce Proceedings?
Have you wondered whether you will be penalised for cohabiting with another person before you are divorced and your financial aspects resolved?
This is actually a very common question, as you will see from the case of Hart v. Hart (2016) which is considered below.
In this case, the parties were Husband and Wife.
An agreement could not be reached in respect of the finances and therefore proceedings were issued.
During the proceedings, the Judge confirmed that the fact the Wife had been cohabiting with her new partner for a number of years, did not reduce her need.
As part of the financial settlement, the Wife was awarded a lump sum of £273,000.00 on account of potential future capital gains liability.
The Husband appealed the Judge’s decision.
The Husband argued that the Judge was wrong to state the Wife’s cohabitation did not reduce her need. He felt this was unfair on him.
In addition, the Husband stated that the Wife should not have been awarded a lump sum for potential capital gains tax, given it was unlikely she would dispose of the assets in question and therefore capital gains tax would not arise.
The Husband was refused permission to Appeal. This was mainly because the Husband did not provide a transcript of the proceedings and therefore the court could not evaluate whether or not injustice had occurred.
However, in addition, the Court confirmed that the issue of the Wife’s cohabitation had been disclosed during the proceedings and therefore the Judge was fully aware of the position when providing his Judgement.
The Court held that it felt the potential capital gains tax was more likely to arise than not and therefore the Judge was right to award the lump sum payment in this respect.
Whilst the above case confirmed that the Wife’s cohabitation did not reduce her needs in the financial proceedings arising from her Divorce, this is not always reflected by the outcome at Court.
If you have any queries in respect of the above or would simply like advise in respect of a divorce or the related financial aspects, please contact our offices on 01323 727321 to arrange an appointment and we will be happy to discuss this with you.
Please note that the family department offer a free initial 30 minute interview to provide general advice and guidance in relation to your matter.