Going through a divorce brings many complex personal, legal, and financial challenges. One key document that often arises in UK divorce proceedings is Form E – the financial statement. This in-depth form sets out the financial position of each party in a divorce case and is used to help the court make appropriate decisions about financial settlements.
A Form E Financial Statement is roughly 30 pages long and requires documentation to confirm the validity of each party’s assets and liabilities. In this article, we’ll clarify exactly what you need to complete Form E, when you need to complete it, and when professional assistance may be advisable.
An Overview of Form E’s Role in Divorce
So, what exactly is Form E? It is a comprehensive statement that outlines your financial position, obligations, and overall net income during divorce proceedings.
To answer the question of whether it’s compulsory to complete a Form E statement, the simple answer is that it depends on the stage you are at with the divorce, and how financial arrangements are going to be agreed.
You may have to complete Form E if mediation fails to produce a financial settlement agreement, whereas you won’t need to if you are agreeing on terms amicably, but you may wish to. Completing the document accurately enables legal teams and, if necessary, the court to make fully informed decisions regarding the division of assets like property, pensions, and savings in the ensuing divorce ruling.
Specifically, Form E requires disclosure of details like:
- Current earnings and expected future income
- All holdings and investments
- Pension entitlements
- Trusts, wills, and probate
- Life insurance policies
- Existing expenses and outgoings
- Capital gains tax and income tax liabilities
- Mortgages or loans
This allows legal teams to quantify current shared assets along with each individual’s independent means. The exact split outlined in any ensuing financial court order will reflect this detailed picture.
Therefore, for contested divorces, Form E is vital.
When Do You Need to Complete Form E During Divorce Proceedings?
In many divorce cases, Form E completion becomes necessary if:
- Mediation fails to produce a financial agreement.
- Using solicitors to negotiate agreements.
- Going to court to obtain a mandated financial order.
- One party contests the initial proposed financial settlement.
- There are complex assets like businesses or equity stakes to divide.
- Significant sums of debt need allocating appropriately.
- One spouse’s financial interests require protecting.
Essentially, Form E provides more visibility to ensure settlements are fair and informed. So, contesting Form E requests is very rarely advised.
In simple cases with minimal joint assets though, or amicable separations, it may not be essential. However, seeking legal and financial guidance is key to knowing if your situation necessitates Form E.
When Should You Complete a Form E?
The general consensus is that both parties complete a Form E agreement as soon as possible, as this will facilitate a smoother and faster financial resolution. However, for messy divorces, this may not always be possible.
If you seek legal representation or court intervention, you will be obligated to complete a Form E before the first hearing, usually a month or two in advance. If this isn’t provided, the court can issue penal notices (if applied for), which can incur further legal costs and complications.
Therefore, for the quickest and most efficient results, it’s wise to fill out a Form E only when necessary, and have it prepared to issue to the court if its intervention is required.
How Can Accountants Assist With Form E Completion?
Form E asks for extensive financial details that most individuals will not have to hand. It will likely take several hours to complete a Form E, and, depending on the complexity of your shared assets and liabilities, can be even longer. Concealing or neglecting to include any income or asset details will only complicate and delay the settlement and could result in costs being awarded against you for wasting the court’s time.
Therefore, for most busy professionals with complex estates where business or property portfolios need to be included, seeking professional third-party financial specialists can prove invaluable.
Seeking expert accounting guidance maximises the chances of Form E details being filled in accurately and with no ambiguity. Not only that, but it could identify tax planning opportunities when dividing assets.
While simpler divorce cases may not demand third-party involvement, complicated situations often rely heavily on it. Ultimately, enabling informed, fair divorce case judgements is something that both parties want for each other, despite how a relationship may have broken down.
A divorce specialist will be able to help by:
- Helping source all required figures and statements, investigate policies, value assets etc.
- Optimising presentation, compiling details in the required Form E sections clearly highlighting the most pertinent facts.
- Maximising accuracy, ensuring no information is misrepresented.
- Advising on tax-efficient separation of assets.
As Chartered Accountants in Surrey, we are no strangers to helping clients overcome personal financial challenges like divorce. Getting proactive, transparent accounting support from the outset saves you significant stress while navigating difficult times, leaving you with the best possible financial outcome. Contact us today to see how we can help you.