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Assets - defer sale of FMH?

  • ATMSPC
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07 Mar 20 #511720 by ATMSPC
Topic started by ATMSPC
After some initial refusal to accept that pensions are part of asset pot, STBX now has had legal advice.

Assets are 400k equity, 245k my CETV, 509k his CETV = total 1,154k

He has been advised that, as I have the children resident:-
• equity in property should be split 60:40 in my favour, and
• 20% of his CETV tx to my pension would provide parity and would split our pension pot 54:46 in his favour.

On that basis that the total assets would be split 50.9% to me and 49.1% to him.

His initial offer to me following this advice is sell the FMH, with equity 60:40 to me, which gives him £160k as deposit to buy a house plus he will transfer a value of 17.5% of his pension to mine (no idea why not 20%).

My preference is to defer sale of the house for perhaps 3 or 4 years to provide stability for the children, both in high school, one of whom is diagnosed ASD/ADHD, finds education a challenge, very change averse and will be starting GCSE year in September followed by a transition into some kind of further education. His behaviour is increasingly causing stress and upset which quite honesty I will struggle to cope with as well as trying to find a suitable house for us simultaneously with viewings and negotiations on this one. The younger one is more resilient but walks to his school easily from here. We also have a daughter at uni but she has a room here too which is also a spare room if someone stays.

I can only re-mortgage to half of the amount he wants but I can do that asap as our joint mortgage is repaid as of next month.

My proposal is to release half of his share of the equity now and have an order, that on the future sale of the house, the remaining amount would be released to him. I think for this I would have to have the house transferred to me solely for re-mortgage purposes?

With his salary (£20k more than mine) and release of the initial share, he would be able to buy an apartment similar to the one he's been renting for 3 years and pay it off in 5 years, or he could get a mortgage of more and for longer which should enable him to buy a 3 bed house.

Given that I'm prepared to settle on a fairly equal overall split, I am receiving £200 per month less CM than the calculator suggests and I am willing to defer only for a few years, how likely is it that a court would order a sale of the FMH sooner rather than later if he goes to court?

If the court would agree to a deferred sale, is this a Mesher order and how does he stand in terms of income tax, capital gains tax when he would receive his deferred share of the equity?
How likely is it that a family law solicitor could accurately predict the odds of such an order being granted?

Thanks for any insight.

  • hadenoughnow
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08 Mar 20 #511724 by hadenoughnow
Reply from hadenoughnow
How big is the FMH?

How much money would be released if you moved?

If there is no mortgage at present but you are able to raise sufficient to give him a decent deposit for a property big enough for the children to stay with him, then have you considered offsetting your entitlement to a share of his pension against equity so you can keep the FMH and still have a Clean Break?

NB child maintenance is a statutory responsibility and not something you can bargain with as part of the financial settlement. You might as well make sure he is paying what he should. It may help you get a bigger mortgage.

Ultimately the settlement should take account of your respective needs and those of the children first. Your priority is clearly housing; he may be more keen to hold on to more (or all) of his pension.

I would suggest a call to the helpline and see if one of our fixed price services could help you explore your options and put together a proposal to consider.


Hadenoughnow

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08 Mar 20 #511726 by ATMSPC
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Thanks for your prompt reply.

This house has 4 bedrooms - boys have one each and daughter has hers though she's at uni (I know that legally she doesn't count as a dependent) and may be back after finishing her degree in summer.

After selling costs there should be £400k equity so his proposed split would give me £240 and him £160 to use as deposits.

I can raise £80k by remortgaging, so only half of what he wants. I would consider that enough for him to put down on a 2 or 3 bed house for about £240k with a 14 year mortgage for the rest. That would take him to 71 though and he says he wants to retire in 5 years time. Hence my suggestion to defer sale so he'll have another lump sum to come to pay off his mortgage early.

If we split 50:50 the total assets, I would need £332k to reach my share at £577k. That would be all but £68k of the equity if I didn't have any of his pension.

I've said I'd happily take less or none of his pension (which he at first didn't seem to appreciate was part of our joint assets) but he has now fixed on this £160k figure as being what he needs as a deposit and won't budge. If I don't agree to sell he intends to "pursue the legal route". After next month when the current mortgage is repaid, he doesn't think it's fair if I'll be living for free when he is paying rent and he has said he'll stop paying CM so he can afford a solicitor!

Hopefully as part of that legal route, his solicitor would advise him of his statutory responsibility in respect of CM.

Ultimately I don't want him to waste lots of money pursuing a legal route if a court is likely to agree that the house sale can be deferred for 5 years. Nor do I want him to waste the same if the court agrees with him and orders a sale (which would probably end up being bang in the middle of our son's GCSE year).

  • hadenoughnow
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14 Mar 20 #511786 by hadenoughnow
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What are your respective incomes?

If you were to raise £80k to provide a lump sum, that is 20% of the equity (not taking costs of sale into account).

He has almost 70% of the joint pension pot.

An 80:20 split on property is at the top end of the spectrum of fairness. However this is balanced against pension which would be split close on 30:70 based on CEV. The pension pot is also nearly twice the value of the FMH.

If his income is sufficient to get a 2-3 bed property with an £80k deposit and he would be able to use his lump sum to reduce/clear it in a few years time, I think there is every chance a judge would see this as a straight forward solution.

NB if he is not paying CM at statutory minimum, you should write to his solicitor to ask that this is rectified within a given time frame. If it isn't, you should contact CMS and ask them to intervene.

As I said, get a legal opinion - you can use our fixed rate legal financial consultation. If you need help to write letters etc or if you do end up in the court process and need assistance we can provide that too.

Hadenoughnow

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