24th October 2024 • The HERALD • Page 73 v INDEPENDENT, LOCAL AND PROUD v ASK A PROFESSIONAL Financial Advice During Divorce by Michael Osman, Oyster Financial Planning Your path to confidence and a secure future Divorce can be bewildering, especially when managing your nances. However, understanding your options can make the process more manageable. Financial concerns may not be your rst thought during a marital breakdown. Still, given the signi cant impact divorce can have on your nancial future, it’s crucial to take proactive steps to safeguard your nancial security. O en, decisions are made in emotionally charged settings, and the financial implications may not become apparent until much later. Involving professional nancial advisers alongside your solicitor can be invaluable. People frequently consult nancial advisers a er a divorce settlement is agreed upon, but engaging a nancial planner early on can help shape the settlement more e ectively. We have seen this so many times with clients we have worked with and helped both understand their nancial future post-divorce and giving con dence that the agreement put in place works for them and allows them to move forward. Role of Professional Advice Your solicitor will handle the legal aspects of your divorce, while your professional nancial adviser will focus on the long-term nancial implications of your decisions. ey will guide you throughout the process and beyond, helping you understand your nancial situation thoroughly. Tax Implications of Divorce Divorce is a complex process that involves the careful division of assets to meet the needs of both parties nality, allowing both individuals to move forward without future nancial entanglements related to the pension. In our experience Pension Sharing has proven the most popular in most cases. Savings and Investments Whilst not as complex as Pensions when dealing with divorce, there are still o en complications. ISAs for example can only be held in one person’s name and if they are split the tax bene t for one person will be lost. Other investments can have complications as well. Business Assets ese just as other assets form part of the calculation. Particular care is taken with business assets as selling o or breaking up part of business can impact on the future livelihood of one of the sides involved. If a trade o with other assets can take place this is desirable but sometimes is just not possible. As you can see there are many facets to negotiating a fair and reasonable settlement to satisfy both parties now and leave them in good shape for their nancial future. Taking both legal advice coupled with nancial planning guidance can work perfectly together. If you are going through or contemplating divorce and feel you need to understand the nancial implications for you from any negotiated settlement, then please do get in touch we have lots of experience in this area. Email: Michael@oyster nancialplanning.co.uk, call: 023 8084 8410 or just pop into our o ce in Hythe village centre. while minimising the tax impact. A vital aspect of a divorce settlement is understanding how it will in uence your tax position, including Income and Capital Gains Tax. During a speci c window, spousal exemption applies, and assets can be transferred on a no-loss, no-gain basis, which can help mitigate some tax liabilities. However, once this period lapses, you may be liable for Capital Gains Tax on certain assets. It’s important to get guidance on this. Pensions and Divorce Pensions o en represent one of the most signi cant nancial assets in a divorce settlement, making it crucial to address them e ectively. ere are three primary ways to handle pensions during a divorce: pension sharing orders, pension o setting, and pension attachment or earmarking. A pensionsharing order is one of the most straightforward methods, as it divides the pension assets between the divorcing couple, providing a clean break. e advantage of a pension-sharing order is its clarity and Michael Osman, Oyster Financial Planning
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