Selling and splitting proceeds

Why sell?

Selling is often the most straightforward option:

• Clean break – neither party has ongoing ties to the property
• Releases capital – both can use proceeds to rehouse
• Fair division – cash can be split precisely
• Fresh start – no daily reminder of the marriage

It’s particularly appropriate when:

• Neither party can afford to buy out the other
• You both need capital to purchase new homes
• The property has bad memories
• Children don’t need stability in that specific home
• You want finality

Agreeing to sell

Before marketing the property, agree:

The asking price

Get two or three estate agent valuations to establish a realistic price. If you disagree on value, you could:

• Take an average of valuations
• Instruct a surveyor for an independent view
• Agree a minimum acceptable price

The estate agent

Choose an agent together if possible. Consider:

• Their valuation
• Their fee structure
• Their local track record
• Marketing strategy

If you can’t agree, your consent order can specify how the agent is chosen (for example, each nominates one and they agree a third, or you go with whoever offers the best terms).

When to sell

Agree a timeline:

• Market immediately
• Wait until children finish the school year
• Wait for market conditions to improve

Be realistic – markets are unpredictable, and delaying has costs (ongoing mortgage, uncertainty).

How proceeds are split

The division of sale proceeds should be set out in your consent order. Common approaches:

Percentage split

Each person receives a percentage of the net proceeds:

• 50/50 – equal split
• 60/40 – one person receives more
• 70/30 or other ratios based on settlement

Fixed sum first

One person receives a fixed amount first, with the remainder split or going to the other:

• “Wife receives first £50,000, balance to husband”
• “Mortgage paid, then wife receives £100,000, balance split equally”

After specific deductions

Proceeds used to pay certain debts before division:

• “Mortgage paid, joint loan paid, estate agent fees paid, balance split 55/45”

Calculating net proceeds

Net proceeds = Sale price – Mortgage – Selling costs – Agreed deductions

Typical selling costs

Example calculation:

Sale price: £400,000

• Mortgage: £150,000
• Estate agent (1.5%): £6,000
• Legal fees: £1,200
• EPC: £80

Net proceeds: £242,720

If split 50/50: £121,360 each

Managing the sale cooperatively

Communication

Keep each other informed about:

• Viewing feedback
• Offers received
• Any issues that arise

Use email to create a record of decisions.

Decisions

Agree how you’ll handle:

• Accepting offers (both must agree? One person decides?)
• Price reductions if needed
• Timing of completion

Access for viewings

If one of you still lives there:

• Be cooperative about viewing times
• Keep the property presentable
• Don’t sabotage the sale

One person’s reluctance

If one spouse drags their feet or refuses to cooperate, the other can:

• Apply to court for an order requiring sale
• Ask the court to conduct the sale on their behalf

Courts have power to order uncooperative parties to comply.

Tax considerations

Capital gains tax

Your main residence is usually exempt from capital gains tax (CGT) through Private Residence Relief. This continues for up to 9 months after you stop living there.

If one person has moved out, the property may still be their main residence for CGT purposes for 9 months, provided they haven’t established another property as their main residence.

Beyond 9 months, there may be CGT to pay on any gain since they left. Complex rules apply – get tax advice if concerned.

Stamp duty

No stamp duty is payable when selling – it only applies when buying. However, if one of you is buying a new property, you’ll need to budget for stamp duty on that purchase.

Timing the sale

When separation is recent

Selling immediately may be practical, but consider:

• Are you both ready for this step emotionally?
• Do children need time to adjust?
• Is the property market favourable?

Delaying the sale

You might agree to delay if:

• Children need stability during school exams
• Market conditions are poor
• One person needs time to arrange housing

Delays should be specified in your consent order with a clear date or trigger for the sale.

One person living there until sale

If one spouse stays in the property while it’s marketed:

• Who pays the mortgage?
• Who pays bills and maintenance?
• How long can they stay?

These practical matters should be agreed and documented.

What if the property won’t sell?

If the property doesn’t attract buyers:

Price reduction

You may need to reduce the asking price. Agree in advance at what intervals you’ll review the price and by how much.

Change agent

A different agent might have better results. Agree how you’ll handle this.

Rent it out

If selling is impossible, you could rent the property and share the income until the market improves.

Auction

As a last resort, auction guarantees a sale but typically achieves lower prices.

What if it’s in negative equity?

If you owe more than the property is worth:

• You can’t simply sell and split proceeds – there are none
• You’d need to pay the shortfall to the lender
• You might need to negotiate with the lender about the debt
• The debt becomes part of your overall financial settlement

This is complex territory – seek legal advice.

After the sale

Once the property sells:

1. Complete the sale – your solicitors handle this
2. Pay off the mortgage – the lender is paid from proceeds
3. Pay selling costs – estate agent, legal fees
4. Divide proceeds – according to your consent order
5. Update your consent order – if not already done, formalise the sale terms

Each party receives their share by bank transfer from the conveyancing solicitor.