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Fiona Turner and Noel Ferry analyse key differences as to financial provision in Scotland when compared with England and Wales

In Scotland, if the value of an asset has crashed post-separation, this is irrelevant when establishing the extent of matrimonial property which should be shared, as will be an increase in the value of assets post-separation, and this can result in a significantly different outcome for a client.

Part one of our overview of the main differences between family law in Scotland and in England and Wales looked at divorce and dissolution. This concluding part will examine the differences as to financial arrangements in the two jurisdictions, including on divorce, on death, for cohabitants and within a pre-nuptial or cohabitation agreement.

Financial application options in England & Wales and Scotland

The table below sets out the available options for a financial application in England and Wales and in Scotland:

  England/Wales Scotland
Financial remedy/financial provision Yes Yes, provided that a claim for financial provision is made before decree of divorce (on which, see more below)
Trusts of Land and Appointment of Trustees Act 1996 (TOLATA 1996) Yes No
Schedule 1, Children Act 1989 (ChA 1989) Yes No
Claims under cohabitation law No Yes
Inheritance (Provision for Family and Dependents) Act 1975 (I(PFD)A
1975) claims
Yes No, although there are specific rules/rights on death, see more below
Part III, Matrimonial and Family Proceedings Act 1984 (MFPA 1984)
as to financial provision after overseas divorce or dissolution
Not applicable in intra-country disputes, eg between England
and Wales and Scotland
Not applicable in intra-country disputes, e.g. between England and
Wales and Scotland

Forum shopping is not usually associated with cross-border divorce or dissolution, but is applicable in intra-country disputes as much as those between more far-flung destinations. There are some key differences between the law in Scotland and in England and Wales.

General principles

England and Wales

In England and Wales, all resources held by the parties worldwide, whether in their joint or sole names or whether held with third parties, are assessed when ascertaining the terms of a reasonable and fair financial settlement in accordance with s25(2)(a), Matrimonial Causes Act 1973 (MCA 1973) or Sch 5, Pt 5, Civil Partnership Act 2004 (CPA 2004). The court will consider which assets constitute matrimonial property acquired during the marriage and assets acquired both before the marriage/relationship and those acquired post-separation, i.e. all assets are available for consideration when ascertaining the terms of an appropriate financial settlement.


In Scotland the relevant legislation is the Family Law (Scotland) Act 1985 (FL(S)A 1985) and the key differences are:

Relevant date/date of separation: the matrimonial property available for a fair financial settlement is limited to those resources acquired by the parties during the course of the marriage up to the relevant date (ss9(1)(a), 10(1)-(2), FL(S)A 1985). This is usually the date that the parties separate but could also be the date of service of the summons in the action for divorce (ss10(3)(a)-(b), FL(S)A 1985). For example, if a party won the lottery, or received a significant inheritance, the week after separation the other spouse would not have any entitlement to a share of the same on divorce.

Gifts and inheritances: any gifts or inherited assets are not considered matrimonial property if they remain in the same format as received and have not been sold or converted into new assets during the marriage (ss10(4)-(4A), FL(S)A 1985). Such assets will effectively continue to belong to the party that received them.

Pre-marriage accrual: any assets acquired before the marriage would not be considered matrimonial property and again would continue to belong to the party who acquired them. An exception is that any property or its contents acquired before the marriage which the parties use as a family home or contents (plenishings) would be deemed to be matrimonial property and available for division on divorce (ss10(4)(a), 10(4A)(a), FL(S)A 1985).

It is therefore important to establish:

  • the date of separation/relevant date;
  • what resources are matrimonial property; and
  • what the value of those resources are at the date of separation/relevant date.

Differences between the jurisdictions

At the time of writing, COVID-19 continues to wreak havoc on the financial and business resources of clients. The courts in England and Wales will assess a financial settlement based on the resources available at that time of determination, whereas the Scottish courts will assess the value of the resources at the date of separation/relevant date. If the value of an asset has crashed post-separation, this is irrelevant when establishing the extent of matrimonial property which should be shared, as will be an increase in the value of assets post-separation, and this can result in a significantly different outcome for a client.

One exception to this general rule is property which is to be transferred between the parties. Where property is to be transferred from one party to the other, it will be valued at the ‘appropriate valuation date’ (s10(3A), FL(S)A 1985). For example, if the jointly owned family home is to be transferred to one of the parties, then the valuation used will be as at the date of agreement or court order, rather than the value at the date of separation.

Of particular note is that a party in Scotland must claim financial provision before the decree of divorce is issued (s8, FL(S)A 1985). In some cases, this can be a fairly short time frame, of just a few weeks. If a party fails to make a claim, they are prohibited from pursuing any substantive financial claim unless they can get the decree reduced and as mentioned above, Pt III, MFPA 1984 does not give that party another bite of the cherry as it does not apply to intra-country disputes. Parties should therefore make a claim for financial provision as soon as they are served with Scottish proceedings.

Entitlement to a fair share

In both jurisdictions, any division must be fair and reasonable having regard to the parties’ respective resources (per s9(1), FL(S)A 1985 in Scotland and s25, MCA 1973 and Sch 5, Pt 5, CPA 2004 in England and Wales). The courts in England and Wales and in Scotland will consider whether an equal division is appropriate, or whether it is fair in that case to depart from equality.

Each jurisdiction will apply its own case law and legislation, a detailed consideration of which is outside the scope of this article.

Maintenance/periodical allowance

In both jurisdictions, if one party is going to be in a position of financial need they can also apply for spousal maintenance. In Scotland, maintenance prior to divorce is termed ‘aliment’ and ‘periodical allowance’ where the maintenance is after divorce.

A key difference between England and Scotland is the duration of maintenance payments. In Scotland, this is normally limited to no more than three years of payments. In rare cases where there is likely to be severe hardship, this can be paid until death or remarriage. An example of this might be where one party cannot work due to a longstanding illness. In England and Wales, the court has also a wider discretion to assess the duration of payments.

Pension sharing orders

Pension sharing can be done by way of a fixed sum in Scotland, in addition to a percentage basis (the latter being the only option in England).

Final orders

In both jurisdictions, most couples will try to negotiate an amicable agreement based on the above principles to deal with their finances rather than going to court and it is only if the parties cannot reach an amicable agreement that they will need to apply to a court to ask a judge to decide the matter.

England and Wales

In England and Wales, parties are always advised to seek a court order to record the settlement that has been negotiated. On both marriage and divorce, the law provides both parties with a wide range of obligations and financial responsibilities towards their spouse or former spouse. Unless those obligations are formally dismissed, and so brought to an end, by a court order, they are still potentially available for the other party to make a claim against in the future. If a party inherited a significant sum, or won the lottery for example, or if circumstances change such that their spouse needs their support, in England and Wales they could be at risk of a claim, even if a divorce was finalised several years ago (see Wyatt v Vince [2015]). Therefore, it is important to obtain a properly drafted court order to dismiss the risk of a former spouse making a claim in the future.


In contrast to England and Wales, a financial agreement does not have to be approved by the court in Scotland. Once such an agreement is negotiated, agreed and signed it is effectively a contract between the parties. It can be registered to become binding and enforceable in the same way a court order would, but the court will not scrutinise it.

Once an agreement has been concluded, the parties need only ask for a straightforward divorce at some point later when it suits them. The parties generally agree that the action will be undefended so it can proceed quickly. Neither party has to attend court.

If the parties have no children under 16 they can apply for the even quicker and cheaper simplified divorce provided at least one year has elapsed since separation.

Marital agreements

England and Wales

Pre-nuptial and post-nuptial agreements are not legally binding in England and Wales as this would require a legislative change. However, such agreements are persuasive evidence in financial proceedings, especially if certain safeguards are adhered to. The Supreme Court decision in Radmacher (formerly Granatino) v Granatino [2010] shifted the balance so that it is extremely that a marital agreement will be upheld by a court, unless it can be shown that doing so would be unfair to the other party in the circumstances at the time of the divorce.

The Law Commission reported on marital agreements (Matrimonial Property, Needs and Agreements project Law Com No 343) and recommended that they should be largely upheld provided that they meet the needs of both parties. It also recommended safeguards that should be adhered to, which can be summarised as:

  • that the agreement meets contract law criteria (i.e., no fraud, undue influence or
  • misrepresentation);
  • that the agreement is signed as a deed no later than 28 days before the wedding;
  • both parties must have been informed of the implications of the agreement,
  • appreciated those implications and considered (and ideally sought) legal advice; and
  • both parties have made full disclosure of their assets and resources.


Marital agreements are treated differently in Scotland; they are considered legally binding and have been used since the Middle Ages. Such agreements have always been recognised as valid agreements to regulate financial arrangements during marriage and on divorce.

Marital agreements are recognised as valid in the Scottish courts and provided they are prepared and signed properly will be recognised and deemed valid in the event of divorce. Section 16, FL(S)A 1985 specifically recognises that the parties to a marriage might have already reached an agreement pre-marriage or during their marriage.

The court is required to take into account the terms of any agreement when deciding if it should make any financial order in the divorce (s10(6), FL(S)A 1985). The courts in Scotland can set aside or vary the terms of an agreement, but only if it was not fair and reasonable at the time it was entered into (s16(1)(b), FL(S)A 1985). The fact that the consequences of the agreement may be deemed to be unfair or harsh by the time of the divorce is not usually considered relevant if the agreement was deemed fair and reasonable when the parties signed up to it.

There are no conditions that a pre-nuptial agreement in Scotland needs to be signed within a certain time period before marriage. There are plenty of examples where the agreement was signed a few days before the wedding or indeed on the day of the wedding. In Scotland, if there is insufficient time to get an agreement completed, the agreement is sometimes concluded as a post-nuptial agreement and will be equally as valid. It is, however, recommended that any such agreement is considered well in advance of any wedding where possible.

In Scotland, it is not a requirement that both parties to the agreement need to have legal representation, but again it is recommended where possible as this will avoid a lack of legal advice being cited later as a reason the agreement might have been unfairly entered into.

In both jurisdictions, the test for challenging the validity of any marital agreement is a high one. Accordingly, a well-drafted agreement will provide considerable protection and financial certainty in either jurisdiction.

Cohabitation claims

If the parties are unmarried and their relationship breaks down, their legal position and claims are very different depending on where they live and where the assets in dispute are located.

England and Wales

If a cohabitant relationship breaks down, the legal remedies available for property disputes are limited to trust and land law solutions which are not specifically tailored to cohabiting relationships. Claims may be brought under TOLATA 1996 if a party can establish an interest in a property, usually one in which they live or which they own with their cohabitant.

These can be complex disputes. Establishing an interest in a property may be straightforward if clear documentation exists, but if there is no documentation, other evidence is needed to endeavour to establish a common intention trust.

Parents can consider an application under Sch 1, ChA 1989 and make claims for property and lump sums, usually to secure a home for a child and the parent with care to live in. These claims might be made in conjunction with a claim under TOLATA 1996.


In contrast, Scotland has specific legislation to protect cohabitants’ interests when they separate under the Family Law (Scotland) Act 2006 (FL(S)A 2006).

Sections 25-29, FL(S)A 2006 provide cohabitants with certain rights in respect of money, household belongings and joint accounts or savings they may have accumulated during their relationship.

Most notably, s28, FL(S)A 2006 provides cohabitants with a right to make a claim on separation for a capital sum from the other party to try and redress any imbalance financially arising from contributions made by either party to the other during the relationship. For example, they may have been left financially disadvantaged as a result of the relationship or may have financially advantaged the other party.

The test is one of fairness based on the individual circumstances of the particular case itself. The courts have a wide discretion to decide what is fair but they can only award a capital sum. They cannot order a transfer of a house or other property, or a pension share as they could in a divorce case.

Note that a cohabitation claim must be made within one year of the date of the parties ceasing to cohabit with each other. Any claim made after that will be time-barred and therefore it is important that in a cohabitation situation legal advice should be sought as quickly as possible after any separation.

Cohabitation agreements

In both jurisdictions, clients are advised to consider the merit of a cohabitation agreement. Understanding the position at the outset and taking simple precautionary measures can help to prevent significant problems later on. Cohabitation agreements can:

  • regulate arrangements during cohabitation;
  • provide for what happens to assets if the relationship breaks down; and
  • be wider in scope than a court-imposed solution.

England and Wales

A cohabitation agreement entered into as a deed can have contractual status, and so it is widely understood that such agreements can be enforced provided contractual principles have been complied with. More rarely, even an oral agreement may suffice (see Ely v Robson [2016]).


Given that claims by cohabitants in Scotland can be for substantial sums, couples contemplating cohabiting should consider whether it might be prudent to enter into a cohabitation agreement to regulate what should happen if they later separate. The cohabitation legislation in Scotland specifically recognises that a cohabitation agreement might exist (ss25(2)c), 26(3) and 27(2), FL(S)A 2006). It is generally accepted that such agreements would be a binding contract in Scotland and therefore can specifically exclude future claims.

As with pre-nuptial agreements in Scotland, these types of agreement are becoming increasingly popular. A well-drafted cohabitation agreement will provide considerable protection for any person considering, or currently, cohabiting.

Inheritance claims

England and Wales

In England and Wales, practitioners are familiar with the options available to clients under the Inheritance (Provision for Family and Dependents) Act 1975 (I(PFD)A 1975), whereby a class of potential claimants, including those who were living with or cohabiting with the deceased, or were financially dependent on them, may raise a claim. This applies to cases where a will has been made, or on intestacy. A child whose parent has died may also have a claim, even if they were not financially dependent on that parent at the time of their death.

The court can make such financial provision as it judges reasonable having considered the criteria set out in I(PFD)A 1975, and having regard to all the circumstances of the case. If the claim is successful, this may result in cash payments being made from the estate or an order that property is transferred to the applicant, including for their housing needs.

Claims need to be brought within a strict six-month time limit from the grant of probate or grant of representation, although the court has the power to allow claims out of time in certain limited circumstances (s4, I(PFD)A 1975). It is therefore essential to seek expert advice as soon as it becomes clear that insufficient financial provision has been made. This is also important in cases where it may be appropriate for an interim order to be made to meet immediate financial needs (s5, I(PFD)A 1975).


I(PFD)A 1975 does not apply to Scotland, which has specific legislation governing inheritance. There are three principal ways in which one person can inherit from another in Scotland:

  • by legacy (also called a bequest) in a testate case (where there is a will in place);
  • by intestate succession (i.e., by virtue of specific rules governing who can inherit an
  • estate when there is no will in place); and
  • by ‘legal rights’, under Pt II, Succession (Scotland) Act 1964 (S(S)A 1964).

If there is a will in place, that will usually cover arrangements in respect of the estate and how it should be distributed. However, legal rights can operate in both testate and intestate situations and are indefeasible rights that a spouse and children of the deceased are entitled to against the ‘moveable’ part of the estate, whether there is a will in place or not.

In Scotland property is either moveable property, e.g. money, shares, belongings, and anything else that can be moved around, or heritable property, i.e. fixed property such as land or a house. Legal rights do not apply to heritable property and only apply as a claim for money and the moveable parts of the estate.

Legal rights for a spouse are called relict’s rights, and for children bairn’s rights or legitim. There is no need to go to court to assert these rights, as they apply in every case unless the person entitled to them agrees to waive their entitlement.

If there is no will in place, or the will has not been drafted well enough to cover all of the deceased’s assets (known as partial intestacy), then the net estate after debts are paid will be distributed in a certain way:

Spouses: first, a spouse has additional rights known as prior rights to a certain proportion of the net intestate estate (after funeral costs and debts have been paid off), which take priority over any other claims on an intestate estate. This is an entitlement to a certain cash proportion of the value of any dwelling house, plenishings and money in the intestate estate and is taken before legal rights apply.

Legal rights: for any spouse and/or children.

Other beneficiaries: if there is no will and there is still some estate left after prior rights and legal rights have been taken then S(S)A 1964 provides a list of who is entitled to the residue of the estate, with an order of entitlement for various relatives like children, parents, siblings and so on.

Prior to 2006 cohabitants had no succession rights, unless they were left legacies by their partner. Now, only in an intestate case (i.e., where there is no will) can a cohabitant apply to the court for a cohabitant claim under s29, FL(S)A 2006. The court can make a discretionary award of a capital sum to a cohabitant from the estate. In some cases that can be as much as a spouse would have been entitled to under intestacy. Again, there is a very strict time limit (even stricter than England) of six months from the date of death (i.e. as opposed to the grant of probate or representation, which is called ‘confirmation’ in Scotland) to make such a claim.

Where there is a will in place, the cohabitant will not be entitled to make any claim and so will have to hope that they have received a bequest instead. The Scottish government is looking at whether to change the law to provide for claims even where there is a will in place.  

Case references

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This article was first published in Family Law Journal (Legalease)


For more information on financial arrangements on divorce or dissolution, contact our family law solicitors. We also have a dedicated team specialising in Scottish family law.