Coronavirus and financial negotiations

Covid-19 has had a profound and likely long-lasting effect on the economy. The value of assets have taken heavy falls and the risks associated with them have risen significantly. When - and if - stabilisation and recovery will happen is a matter of conjecture.

In times of great uncertainty, it is prudent to proceed with caution. Depending upon your circumstances, it may be sensible to defer financial negotiations with your ex until things have stabilised.

If that is not possible (and for some, it may be beneficial to settle now), you will need to take into account:

• that implementing any agreement or order is likely to take longer than usual, particularly if you are looking to sell property
• it is probable you will need to revisit valuations, whether that’s pensions (read more here about the impact of the coronavirus outbreak on pensions), investments, property or businesses
• it is possible you will need to revisit tax and CGT calculations to take into account changes brought in by the most recent budget to Entrepreneur’s Relief (reducing the lifetime limit from £10m to £1m) and Principle Private Residence Relief (reducing the grace period for non-occupation from 18 to 9 months) as well as falls in asset values
• a likely need to share risk.  For example, on a property sale, it may be wise to agree you will each receive a percentage of the sale proceeds rather than a fixed sum. 

And if you are heading to court, be aware that hearings will happen remotely.  However, until IT systems and support are put in place you can expect disruption, delays and last-minute adjournments.  Avoiding court and using methods such as arbitration, early neutral evaluation, private FDRs and mediation to resolve disputes are more appealing options than ever.