Emma Davies

Budget 2025: What Families Need to Know When Planning Separation or Divorce
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Budget 2025: What Families Need to Know When Planning Separation or Divorce

Published on
Emma Davies
Emma Davies
Partner
Nelsons Law

The 2025 Autumn Budget brings several tax and financial reforms that could significantly affect separating couples, especially those with complex assets.

Emma Davies, partner and family law specialist at Nelsons, highlights that these updates make it even more important for families to plan ahead. Below Emma outlines the key changes and what they mean for those preparing for separation or divorce.

November’s Budget introduced a series of reforms that will shape how families manage their finances going through separation or divorce, some of these changes carry significant strategic implications.

While many headlines focused on support for lower-income families, the Budget also introduced reforms to the taxation of wealth, property income and investments. These shifts mean that separating couples, particularly those with complex assets, should take specialist advice earlier and plan their financial arrangements with even greater precision.

  1. Increased tax focus on wealth and asset income

A central theme of Budget 2025 is increased taxation on income derived from assets, including investment portfolios, rental properties and other passive income streams.

Why this matters during divorce

  • Asset-related tax liabilities can directly influence the value of a settlement.
  • Transfers of investment assets or property between spouses, traditionally tax-neutral, may now carry more considerations around future tax exposure.
  • Individuals with diversified portfolios will need to evaluate the tax efficiency of keeping or trading certain categories of assets, especially where maintenance obligations are involved.

The opportunity

This is the time to revisit tax planning, both before and during a divorce. With specialist advice and careful planning it is possible to preserve value and reduce future tax exposures.

  1. Property and investment portfolios require new strategy

Reforms affecting property income and the broader taxation of asset-derived wealth mean that real estate portfolios, buy-to-let interests and investment properties require closer evaluation during a divorce.

Potential impacts

  • Rental income may attract different tax treatment, affecting affordability of ongoing financial commitments.
  • Timing of asset disposals, particularly high-value properties or shares, becomes more important.
  • Practical takeaway

During negotiations, it’s no longer just about who gets what, but who can most efficiently hold a particular asset class going forward and it will be important to work in tandem with your family lawyer and other professional advisers.

  1. Pension and long-term wealth planning take centre stage

The Budget includes reforms to pensions and savings support including caps on salary sacrifice pension contributions which means these schemes will become less tax advantageous.  In turn, this affects long-term financial planning during divorce as the ability of divorcing couples to rebuild their pensions post-divorce needs to be considered and may affect how settlements are structured.

For individuals with substantial pension wealth, this means:

  • Greater scrutiny on how pensions are shared or offset.
  • Increased importance of actuarial valuation to ensure fair outcomes.
  • More strategic use of pensions as part of overall settlement structuring.

Given the complexity, specialist advice is highly recommended when reviewing pension division and post-divorce retirement planning.

  1. Tax threshold freezes: A slow-burning impact

Personal tax thresholds remain frozen, effectively pulling more individuals into higher tax bands over time (“fiscal drag”).

For some individuals, this means:

  • Increased exposure to higher tax rates on both earned and investment income.
  • Potential increases in effective maintenance obligations.
  • More need for forward-thinking cash-flow planning post-divorce.

This change subtly but meaningfully affects long-term affordability and financial planning for both parties.

  1. Changes to family benefits: Relevance for blended and larger families

Although primarily aimed at lower-income families, the abolition of the two-child limit for Universal Credit and related child benefits has indirect implications for separated parents, blended families and households with childcare responsibilities split between homes.

For clients with more wealth, the relevance is twofold:

  • It may affect negotiations where one parent has significantly lower income or earns irregularly (e.g. entrepreneurs, directors, or individuals with fluctuating asset income).
  • Where school fees, childcare, and lifestyle expectations are high, these changes may form part of broader discussions about child maintenance and living arrangements.

  1. The landscape is more complex – early planning is essential

The Autumn Budget 2025 creates a more complicated financial environment for separating couples, particularly those with:

  • High-value property portfolios
  • Significant investment income
  • Businesses or shareholdings
  • Trust structures
  • International assets
  • Large pension pots

Strategic advice at the earliest stage is crucial. The way assets are valued, shared, or retained now carries different long-term consequences than it did even a year ago.

Emma emphasises that, despite the added complexity, with the right advice families can still make informed and confident decisions about their future. If you’re considering separation or are in the early stages of divorce, Nelsons’ family law team can help you navigate the Budget’s implications and protect your long-term financial position.

To find out more about Nelsons’ family team, please visit: https://www.nelsonslaw.co.uk/personal-legal-services/family-law-solicitors/

For more information, please contact Huma Mian or Niamh Tracey at Cartwright on 0115 853 2110.

About Emma Davies

Emma is a partner and head the family law team at Nelsons. She qualified as a Solicitor in 2008 and has been at Nelsons since 2009.
Emma advises on divorce and financial settlements which involve complex issues and substantial assets. She also advises on pre and post nuptial agreements and separation agreements along with private law Children Act disputes. Emma is a qualified collaborative practitioner.
Emma’s areas of expertise include divorce, civil partnership dissolution, financial provision, collaborative law, pre-nuptial agreements, post-nuptial agreements, separation agreements, parental responsibility, child arrangements, and prohibited steps orders and specific issue orders.

About Nelsons: 

Nelsons was established in 1983 and provides support to businesses, individuals and families with their legal and investment needs. Nelsons’ experience and depth of resource has also enabled them to offer services to other solicitors through Fusion Legal – a mutually-beneficial referrals and support network for law firms. The firm is recognised by the leading, independently researched Legal 500 and is recommended by them in more than 20 practice areas. The firm is recommended by Chambers and Partners and also features in The Lawyer’s UK 200 Annual Report of the UK’s largest 200 law firms. Nelsons has offices throughout the East Midlands in Nottingham, Leicester & Derby

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Top Tips To Consider When Preparing For Divorce
Photo by Wesley Tingey on Unsplash

Top Tips To Consider When Preparing For Divorce

Published on
Emma Davies
Emma Davies
Partner
Nelsons Law

Going through a divorce is a stressful time that can cause conflict between both parties. Specialist family lawyer and qualified collaborative practitioner Emma Davies shares her top tips with us to ensure as smooth a transition as possible into the next chapter of your life.

Understand your financial situation

One of the important things you will need to consider is the distribution of financial assets. Estimating the value of the marital pot will help give you an idea of what you may be entitled to as the Court’s starting point is equal sharing of matrimonial assets.  Giving consideration to your housing needs and what you would need to purchase your own property taking account of your mortgage capacity is a helpful starting point as the Court has the discretion to depart from equality depending on the needs of the parties and their dependent children.  We’d always recommend keeping a budget of your income and expenses as this will help in determining whether you would be entitled to spousal maintenance and, if so, the appropriate amount.

Collate the paperwork

Gathering together all of the relevant financial documentation is at an early date will save a lot of time moving forward and vastly aid in your preparation. Some of the documents you need to ensure you have are:

  • All bank and building society account statements for the last 12 months;
  • Up to date credit card statements;
  • Redemption statements for loans;
  • Details and documentary evidence of investments;
  • Cash Equivalent Transfer Values for pensions
  • Mortgage redemption statements; and,
  • Property Title information.

You will also need your most recent P60 and payslips if you’re employed, or two years of accounts if you’re self-employed.

Look to the future

It can be very easy to get bogged down in the present and focus only on the current proceedings. However, it’s important to consider if it is possible to become financially independent from your spouse after your divorce and whether it is possible to undertake further training or a change of job to improve your position. While the Court can make an order providing you with spousal maintenance if you cannot meet your income needs,  it will work towards the financial independence of both parties and achieving a clean break focussing on what both parties earning capacity is.

Entitlement to child maintenance is,  in most cases, determined by the Child Maintenance Service.  The online child maintenance calculator on the gov.uk website serves as a useful starting point to ascertain the appropriate amount that should be paid by the non-resident parent.

Document your valuables

Keep a full record of possessions with photographs if possible – this includes the contents of your house, vehicles, jewellery etc.–  if anything goes missing, this provides proof of its existence. Try and agree an amicable division of these chattels as often, the legal cost in doing so are disproportionate to the value of those items.

Don’t act in haste

It can be tempting to make quick decisions such as moving out of the marital home., Take legal advice before making any decisions of this magnitude. Once such decisions are made, going back on that choice can often be far more difficult and could also have an adverse effect on your case.

Seek expert advice

The most important thing to do before starting a divorce is to seek legal advice. Having a solicitor put a strategy in place to help you navigate your way through proceedings will drastically ease stress during what we know can be an overwhelming and emotive time. Solicitors can give you a good indication of where you stand and how divorce will affect you financially. Every case is different, and it’s important you seek advice tailored to your specific circumstances.

About Emma Davies

Emma is a partner and head the family law team at Nelsons. She qualified as a Solicitor in 2008 and has been at Nelsons since 2009.
Emma advises on divorce and financial settlements which involve complex issues and substantial assets. She also advises on pre and post nuptial agreements and separation agreements along with private law Children Act disputes. Emma is a qualified collaborative practitioner.
Emma’s areas of expertise include divorce, civil partnership dissolution, financial provision, collaborative law, pre-nuptial agreements, post-nuptial agreements, separation agreements, parental responsibility, child arrangements, and prohibited steps orders and specific issue orders.

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Coronavirus: Is Now a Good Time to get Divorced
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Coronavirus: Is Now a Good Time to get Divorced? And Other Separation Questions

Published on
Emma Davies
Partner and Solicitor
Nelsons

With couples cooped up in lockdown due to the coronavirus, law firms across the country have reported an increase in enquiries from spouses who are wanting to split from their partners.

But with the courts currently closed and the negative impact Covid-19 is having on the economy and housing market, is now a good time to get divorced?

Firstly, can I still get a divorce?

Many court staff and judges are working from home and hearings are being done remotely over the telephone or, in some cases, by video link, so it is still possible, but couples may experience delays.

This is because the courts are prioritising urgent cases, such as those involving domestic abuse or child protection.

However, in most divorce cases, a hearing is not needed. Couples will only have to go to court if disputes regarding financial matters or children cannot be resolved by the separated couple or their lawyers.

Financially, is now a good time to get divorced?

With the impact the Covid-19 pandemic is having on the economy, many people may find themselves in a financially less advantageous position.

Housing markets have come to a standstill, retailers, pubs, clubs and restaurants have temporarily ceased trading, and businesses will no doubt be tightening their belts in an attempt to persevere during these challenging times.

For some, however, a financial downturn could be seen as an advantage when it comes to divorce and securing a favourable financial settlement.

Due to the coronavirus outbreak, many assets may well have diminished in value. Businesses may not be considered as valuable, investments are likely to have suffered, and some pensions will now be worth less than they were only a few short weeks ago.

For the party to a marriage who is – or was prior to the pandemic – in a stronger financial position, the answer to the question “should I divorce now” might well be yes.

Hopefully, the economy will bounce back, as will the value of your assets, leaving you better off than if you had divorced in more stable times.

Can a financial settlement be renegotiated if coronavirus has made it unfair?

Although the timing might benefit you, it may not benefit your spouse, who is likely to object to a final financial settlement being reached until some form of normality has resumed.

Additionally, you should be warned that the unprecedented uncertainty brought about by Covid-19 will mean that the court will likely exercise extreme caution when making final orders, dividing the martial assets until the storm has passed.

Every case is different and it is important you seek advice tailored to your specific circumstances.

What happens if the family home struggles to sell?

At the end of March, the government suspended the housing market as estate agents closed their doors and banks withdrew deals.

As a result, homeowners trying to sell their properties saw the number of potential buyers decline. This, of course, could throw settlements into jeopardy and possibly increase a couple’s capital gains tax liabilities when they do end up reaching a deal.

About Emma Davies

Emma Davies qualified as a solicitor in 2008 and joined Nelsons’ family law team in 2009. She specialises in family law cases and advises on divorce and financial settlements that involve complex issues and substantial assets.

For more information on divorce and separation, please visit nelsonslaw.co.uk or call 0800 024 1976.

Nelsons was established in 1983 and provides support to businesses, individuals and families with their legal and investment needs.

Nelsons’ experience and depth of resource has also enabled them to offer services to other solicitors through Fusion Legal – a mutually-beneficial referrals and support network for law firms.

The firm is recognised by the leading, independently researched Legal 500 and is recommended by them in more than 20 practice areas.

The firm is recommended by Chambers and Partners and also features in The Lawyer’s UK 200 Annual Report of the UK’s largest 200 law firms. Nelsons has offices throughout the East Midlands in Nottingham, Leicester & Derby.

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