Q&As

A financial consent order has been made that provides for the former matrimonial home to be transferred to one spouse on the basis that they obtain the release of the other spouse from the mortgage and for a lump sum to be paid to the transferring spouse. A short time after the order was made, the spouse to whom the property was to be transferred has indicated that they are unable to secure the mortgage release and that they wish the property to be sold. If an order for sale is made, can an additional lump sum be made in favour of the transferring spouse to cover their additional costs and any capital gains tax liability?

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Produced in partnership with Katherine Illsley of 4 King’s Bench Walk
Published on LexisPSL on 28/10/2020

The following Family Q&A Produced in partnership with Katherine Illsley of 4 King’s Bench Walk provides comprehensive and up to date legal information covering:

  • A financial consent order has been made that provides for the former matrimonial home to be transferred to one spouse on the basis that they obtain the release of the other spouse from the mortgage and for a lump sum to be paid to the transferring spouse. A short time after the order was made, the spouse to whom the property was to be transferred has indicated that they are unable to secure the mortgage release and that they wish the property to be sold. If an order for sale is made, can an additional lump sum be made in favour of the transferring spouse to cover their additional costs and any capital gains tax liability?

Pursuant to section 31 of the Matrimonial Causes Act 1973 (MCA 1973), the court has the power to vary its own orders made within financial remedy proceedings, but that power is limited. The types of orders that may be varied are listed in MCA 1973, s 31(2), and include orders for periodical payments and secured periodical payment orders. There is no jurisdiction for the court to vary a lump sum order unless the order provides for the lump sum to be payable by instalments. Even when an order does provide for a lump sum payable in instalments, the court will consider carefully the importance of finality in financial remedy proceedings before agreeing to any variation.

In Hutchings-Whelan v Hutchings, McFarlane LJ (as he then was) stated in relation to lump sum orders that ‘…it is important not to lose sight

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