Douglas Allen talks about post separation accrual, the principles and practical considerations
10th Feb 2025 | Blog
Ring-Fencing of Post Separation Accrual
In financial remedy proceedings, the division of assets often rests on the principle of fairness. However, one recurring issue that often raises questions – and at times, conflict – is the treatment of assets acquired or increased in value after separation – commonly referred to as post-separation accrual. To what extent can such accruals be ring-fenced and excluded from the matrimonial pot? The answer, as with many areas of family law, depends on the specific facts of the case.
The principles in play
The starting point remains the sharing principle: matrimonial assets are typically divided equally unless fairness demands a departure from equality. Post-separation accruals, however, fall into a more complex category. Assets acquired or grown through one party’s efforts after separation may be treated as non-matrimonial and, in some cases, excluded from division.
The distinction often hinges on several key factors:
Source of the Asset: If the post-separation accrual arises from efforts directly tied to the marital partnership, it may retain a matrimonial character. By contrast, assets generated from entirely new ventures post-separation are more likely to be ring-fenced.
Timing of the Accrual: The proximity of the accrual to the date of separation is significant. Assets accrued soon after separation may still bear a strong connection to the marital partnership, particularly if the groundwork was laid during the marriage. Conversely, accruals that occur years later, especially after lengthy litigation delays, may have a clearer case for exclusion as non-matrimonial property.
Passive vs. Active Growth: Passive growth – where the value of an asset increases without any effort, such as due to market forces – is usually shared. Active growth, attributable to one party’s entrepreneurial skill or effort, may be more readily excluded.
The Needs Principle: Even if an asset is deemed non-matrimonial, it may still be invaded to meet the other party’s reasonable needs, particularly where there is a significant disparity in resources.
In GA v EL [2023] EWFC 206, Deputy High Court Judge Stephen Trowell KC distilled the core principles governing post-separation accrual, highlighting the fact-sensitive nature of the issue and identifying the following key considerations:
Post-separation non-matrimonial assets can exist even in the absence of undue delay in proceedings.
Courts must guard against incorrectly treating passive growth as a post-separation accrual, ensuring that such increases in value are fairly shared.
The extent to which one party’s accrual stems from unallocated matrimonial funds must be carefully considered.
Domestic contributions made by the other party during separation should not be overlooked, as they may indirectly support the accrual.
While a formulaic approach is helpful for consistency, fairness demands a tailored, fact-specific assessment.
This judgment underscores the need for a nuanced analysis of how and why post-separation assets have grown, and whether they should be ring-fenced or shared.
Practical Considerations
For solicitors and clients navigating financial remedy cases, the following practical points are key:
Evidence is Critical: Detailed disclosure of how post-separation accruals were generated is vital. If an asset’s growth stems from pre-existing matrimonial property, this weakens arguments for exclusion.
Manage Expectations: While ring-fencing may be attractive in principle, the needs of the other party and the children often take precedence, requiring compromise.
Act Promptly: Delays in proceedings risk complicating the issue of post-separation accruals, as the distinction between matrimonial and non-matrimonial efforts becomes blurred.
Highlight Domestic Contributions: Even if one party has driven post-separation accruals, the contributions of the other—whether domestic, emotional, or logistical—may weigh against total exclusion.
Conclusion
The treatment of post-separation accrual sits at the crossroads of fairness and practicality. Cases like GA v EL [2023] remind us that there is no one-size-fits-all answer; instead, the courts will adopt a nuanced and welfare-focused approach to ensure justice between the parties.
For solicitors advising clients on this issue, careful preparation and realistic advice are essential to achieving the best outcomes. Our Financial Remedies Team is here to help navigate these complexities with precision and expertise.
Douglas Allen
2025
