How to identify Matrimonial Property in Scotland

The first step in identifying matrimonial property in Scotland is to identify the date of separation. This has been explored in the following Insight - The importance of a separation date in Scottish law | Weightmans

Once you have identified the date of separation, the next stage in working out a fair division of a married couple’s assets when they separate is to identify what is and what is not matrimonial property.

What is Matrimonial Property?

In terms of the Family Law (Scotland) Act 1985, s10(4) matrimonial property is anything that is owned by either the wife, husband or by the couple jointly, when they separate, that was acquired by them between the date of marriage and the date of separation.

If the item in question is a heritable property (i.e. a house) then this will also be matrimonial property if it was purchased prior to the marriage for use by the couple as a family home. It is the same position for furniture and plenishings of that property.

Is anything excluded?

There are two exceptions to the above definition.

1.     If an item was gifted to either the husband or wife by a third party, then this will not be matrimonial property. An example of this would be if a wife was gifted a car by her mother, and the car was still owned by the wife at the date of separation, then that car will not be included in the matrimonial property.

If, however, the wife sold the car during the marriage and purchased artwork with the sale proceeds, then the artwork would become matrimonial property;

and

2.     If an item was received by either the husband or wife by way of succession, then this will not be matrimonial property. An example of this would be if a husband inherited a house from his grandmother’s will during the marriage, and he still owned it at the date of separation, then this house would not be included in the matrimonial property.

If, however, the husband sold that house during the marriage and used the money from the sale of the house to buy a boat, then the boat would become matrimonial property.

In summary, if a party receives an item by way of gift or succession and the item does not change and stays in the same format in which it was received, this will be excluded from the matrimonial property.

If the item is converted into another form, then it will be included in the matrimonial property.

Special Circumstances

If an item received by way of gift or succession does convert, a party can argue that special circumstances apply which should mean that the net pot of matrimonial property is divided unequally in their favour. A special circumstances argument does not automatically exclude that asset from the pool of matrimonial property and therefore parties should be careful when intermingling gifts or inherited property within the pool of matrimonial property.

Summary

In general:

• anything that either party owned before the marriage that remains in existence at the date of separation, will not be matrimonial property (unless it was a heritable property or furniture as stated above).
• anything that a party acquires after the date of separation will not be matrimonial property. This would mean that if a couple separated and then the following month the wife won a significant sum of money on the lottery, this would not be part of the matrimonial property. It would be relevant in the question of the wife’s resources. However, the husband would not be entitled to a share of this money.
• The above also applies to any debts of the marriage. If either the husband or wife or the couple jointly took out any debts during the marriage that remain outstanding at the date of separation, then they will be required to be taken into account as it is the net value of the matrimonial property shall be divided.

The question as to what is and is not matrimonial property can be complex, and it is important that parties obtain specialised legal advice to determine what should and what should not be included and whether they have any special circumstances arguments available to them to allow a fair division of the matrimonial property to be undertaken.