When negotiating a financial settlement with your spouse, it is always helpful to understand how a judge may decide to split your assets, were you to end up in court.
When a judge is asked to decide a financial settlement, they will make this decision by looking at all of the circumstances of the case and coming to a conclusion about what is fair. Looking after the interests of any children involved will be a priority.
The starting point is usually that all assets should be equally divided. This is known as the sharing principle.
However, in the case of Sharp v Sharp, the Court of Appeal ruled that various factors in the case justified moving away from this 50/50 split, in order for the financial settlement to be fair.
The couple in the case, Julie and Robin Sharp, had a relatively short marriage. Including cohabitation before their marriage, they had been together for 6 years, from 2007 to 2013. They had no children.
They had both earned similar salaries at the start of their time together. Mr Sharp took redundancy in late 2012. However, while they were married, Mrs Sharp had earned bonuses totalling £10.5 million.
They also kept their finances quite separate, although the judge noted that there was no “deliberate and agreed intention on their part to maintain strict separation of their finances”. He cited the fact that they “not infrequently” split restaurant bills between them and regularly each paid “half of any utility bills on the two properties”, as factors which pointed towards this separation of finances.
In addition, the judge noted that although Mr Sharp was aware that his wife had received “substantial bonuses”, he never knew the details of them. The judge also noted that Mrs Sharp had not only provided the money to buy the two houses, she had also “fully funded the couple’s various holidays”, as well as buying Mr Sharp three Aston Martins.
The High Court awarded Mr Sharp half of the total matrimonial assets, which amounted to £2.725 million.
The judge said that “no sufficient reason had been identified … for departing from equality of division”.
Mrs Sharp appealed this decision.
In the judgement, the judge said: “An automatic or blind application of a 50/50 split in every case can only be an impermissible judicial gloss on the statute, which expressly requires the court to consider all the circumstances of the case.”
At appeal, it was found that Mr Sharp should only be awarded £2 million.
This ruling by the Court of Appeal shows that the 50/50 split of assets may not always be “fair” and is not automatic.
However, every case’s circumstances are different and if you are worried about what this may mean for your divorce, seeking legal advice as to your situation is essential.
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