No-fault divorce came into effect in April 2022. A major development intended to help change the conversation for couples is the introduction of no-fault divorce.
The Divorce, Dissolution and Separation Act 2020 came into force in April 2022, replacing the existing Matrimonial Causes Act 1973, which has required one party to prove their partner is at fault through adultery, desertion, or unreasonable behaviour, with the only alternative being a period of separation: two years where both parties agree to divorce, or five years if one side does not consent.
The new Act allows married couples to issue divorce proceedings without assigning blame, as only a statement of irretrievable breakdown is required. It also makes it possible to file for divorce jointly, allowing couples to reflect a mutual agreement to part.
Importantly, the change is welcomed as a major advance for those wanting to leave abusive marriages. Currently, victims of domestic abuse can take action knowing the application cannot be contested, nor do they have to make allegations requiring investigation or provide supporting evidence.
According to statistics from the Ministry of Justice, Divorce applications rose by 20 per cent in the year following the introduction of no-fault divorce, according to figures from the Ministry for Justice.
Is it a success?
The attraction of what has been promoted as ‘digital divorce’ via an online portal, together with the removal of apportioning blame may seem like a quick-fix, low-cost solution to what was previously a complex procedure. With financial matters becoming increasingly complex combined with delays in the courts, many divorces are taking longer to complete, so this change is important and valuable for many couples.
However, it still requires negotiation and agreement on everything from how any children may be cared for, through bank accounts, business and pensions, to where each partner will live once all things financial have been mediated. Very real challenges may arise if the divorce is finalised without tackling and making an agreement on all these other aspects.
Claims over finances cannot be resolved by personal agreement, even if it seems very amicable at the time. Without a financial order approved by the court, either party can make a financial claim on the other, long after the marriage has ended.
Lack of advice may also leave one side open to exploitation by the other, either because they do not realise what they may be entitled to in a fair division of assets, or they may not even know what assets their former spouse owns.
However, full disclosure through the process of drawing up an application for a financial order, combined with independent advice and oversight in asking the court to make a decision, can help overcome these issues.
Alongside all the challenges, there is some good news, with a valuable change in the way divorcing couples are taxed. Since April 2023 there has been a new structure on capital gains tax reliefs when couples break up. The new rules give separating couples up to three years after the year they cease to live together in which to make a no gain, no loss transfer with no time limit when the transfer is part of a divorce agreement covered by a court order.