Government announces consultation period for review of mediation

On 23 March, the government announced proposals that will, if introduced, mandate mediation for separating families. The aim is to divert family disputes away from the courts, primarily with an eye to shielding children from the impact of acrimonious and long-running court processes often fraught with delays. The proposals place decisions in the hands of the parents, albeit supported by a qualified mediator. Court will be (as it should be anyway) a last resort.

The proposals recognise that mediation is not appropriate for all. It will not be mandated in cases which include allegations or a history of domestic violence, or those raising concerns about child welfare. However, the freeing up of court time and resources elsewhere should allow swifter resolution of family disputes. It is estimated that, each year, 36,000 vulnerable families will benefit from faster hearings and quicker resolutions as a result.

As the consultation gets under way, the government’s Family Mediation Voucher Scheme will be extended until April 2025 backed by an additional £15,000,000 in funding. The scheme provides separating couples with vouchers worth up to £500 to help them solve disputes through mediation. It is reported that over 15,300 families have benefited so far.

LMP partner Kate Stovold, who has recently completed her training as an all-issues mediator with Resolution, is cautiously optimistic about the consultation:

“Any measure that aims to soften the destructive impact of divorce and separation on children must be received with some optimism. However, a cornerstone of mediation is the parties’ voluntary participation in the process. I shall therefore be interested to see how that is considered in the consultation process. I am also mindful that whilst physical domestic violence is more readily identified, domestic violence takes many shapes and forms. As a mediator, I must always be alive to power imbalances, and these can present in a variety of ways. The consultation will require careful and sensitive assessment of these proposals and I await the findings with interest.”

For further information, read the government press release here.

The impact of the Spring Budget on separating couples

Now the dust has settled, family law specialist Lucy Hoare recaps on the key changes set to benefit private individuals following last week’s Budget.


CGT window extended


As announced by Parliament last summer, last week’s Budget has confirmed that the government will legislate in the Spring Finance Bill 2023 to makes changes to the rules that apply to the transfers of assets between spouses and civil partners who are in the process of separating. The changes will take effect for disposals made on or after April 6, 2023. The changes mean that married couples and civil partners will have up to three tax years to transfer assets such as property, shares or business interests between them, before incurring CGT.


Couples and their advisers have currently been working with the ‘no gain, no loss’ window of the expiration of the tax year in which the parties separate to avoid CGT when transferring assets. These new measures will greatly benefit those spouses who are separating/divorcing and are in the process of distributing assets between themselves.  It will particularly benefit those parties involved in more complex proceedings, allowing greater focus on the divorce (as opposed to tax considerations) when agreeing the division of wealth. These changes will no doubt mean that some decisions are being delayed so that couples can benefit.


Parties can benefit from these changes if the transfer of assets are detailed in a court order, so it is important to seek legal advice.  Where tax issues arise alongside divorce and separation, we can work alongside trusted tax advisors to advise you on the best way forward.


Pension and Divorce


Another perhaps more surprising Budget announcement which has relevance for past and future financial settlements is the removal of the current pension lifetime allowance (LTA), as well as an increase in the amount that can be saved into pensions tax-free each year, this rising from £40,000 to £60,000.


The measure is intended to encourage people to keep working later in life.  However, it may have an unforeseen impact on divorce negotiations as the value of larger pensions may now be dramatically increased.  Subsequently a party to a divorce who previously might not have been so concerned about proposing a share over a large pension because of the LTA, may now be more incentivised to retain these assets.  The latter new measures also give divorced parties who have shared their pension a greater chance to recover their pension value before retirement.


Due to these changes, where pension shares have already been agreed but not yet implemented a revised calculation may be required, particularly in cases where a pension offset is required. Negotiations involving pensions of significant worth are complex and we work alongside actuaries and financial advisors to ensure clients are best placed to make the right decisions.


If you have any questions about the implications of the recent Budget on your divorce or separation then Lucy or any member of the LMP team shall be pleased to assist.

Kate Stovold sits as a Citywealth judge

LMP Partner, Kate Stovold, the recipient of two Citywealth awards, has been invited to join Karen Jones and other industry professionals to critique this year’s Future Leaders Awards submissions.

Kate will be meeting her fellow judges on 15 March to review the entries in a range of categories spanning legal, finance, banking, investments and more.

The Future Leaders Awards will be hosted in London on 14 November 2023.

Kate was a winner in 2022 achieving Gold in the Family Partner of the Year category and Silver in the Outstanding Individual of the Year category.