Date published: 24/09/2025

Author: Sajini Sridaran, Paralegal

In divorce and financial settlements, the treatment of assets acquired after separation, known as post-separation accrual, has become an important point in family law, particularly where financial matters have an international element. Below is an insight into how the court will consider these assets.

What is post-separation accrual?

Post-separation accrual refers to assets acquired after separation or an increase in assets that occur after a couple has separated but before their financial affairs are legally finalised. This can encompass various scenarios such as:

• New ventures: Initiating a business or investment after separation.
• Passive growth: Appreciation in value of existing matrimonial assets without active contribution from a party, like a market increase in the value of property or investments. Matrimonial assets typically refer to an asset that is a product of the marital partnership, but can also include an asset that has become “matrimonalised” as a result of the “parties’ intentions and how they treat the relevant asset over a period of time”. Non-matrimonial assets can also be subject to passive growth.
• Active growth: Enhancement of asset value due to one party’s efforts post-separation.

The nature of the accruals significantly influences their treatment in financial settlements.

The court has grappled with the complexities of post-separation accrual, striving to balance fairness with the recognition of individual contributions post-separation. Key considerations include:

1. Nature of the asset: passive growth of a marital asset is more likely to be considered matrimonial (and therefore subject to the equal sharing principle as a starting point), whereas those assets (or parts of assets) from active efforts post-separation may be treated as non-matrimonial, and therefore not subject to the sharing principle.
2. Needs: the court assesses whether the post-separation non-matrimonial assets are necessary to meet the financial needs of both parties. If both parties’ needs are met without reference to these assets, they may be excluded from the overall division of assets. As a reminder, needs are capital or income in nature. Broadly speaking, capital needs begin with the funds needed by a party to adequately house themselves (and any minor children of the marriage) and income needs – again broadly speaking, are the funds required by a party to meet their day to day living expenses.
3. Timing and origin: savings / assets generated from income or bonuses received after separation but earned during the marriage are typically included in the matrimonial pot and therefore subject to the sharing principle. Conversely, earnings from new employment or ventures post-separation may be excluded, although the case law references a 12-month period following separation before this will apply.

Are assets built up by post-separation employment and income always shared?

Not necessarily. In fact, courts in England and Wales are becoming more cautious about automatically including assets generated through post-separation income in financial settlements.

That said, every case is different. Below are some cases:

One important early case was Rossi v Rossi (2007) 1 FLR 790. In this case, the judge, Nicholas Mostyn QC, suggested a cut-off point for when post-separation income should stop being considered part of the “marital pot”. He said that if a bonus or earned income relates to a time period that starts more than 12 months after separation, it shouldn’t usually be treated as a matrimonial asset. Other judges have pushed back, saying this 12-month rule is too rigid.

For example, in H v H (2007) 2 FLR 548, a judge pointed out that using a fixed date like this could lead to unfair results. For example, if a couple separates on December 30, does that mean a whole year’s worth of income suddenly becomes shared, just because it started two days earlier? The court said financial decisions should reflect the specific facts of each case, not just an arbitrary date.

In C v C (Post-Separation Accrual) [2019] 1 FLR 939, the judge made it clear that just because money was received close to the separation date doesn’t automatically make it part of the marriage. What matters more is the context – where the money came from, how it was earned, and what it represents.

Waggot v Waggot [2018] 2 FLR 406 is a modern case where the court said that “An earning capacity is not property. It results in the generation of property after the marriage.”. In other words, a person’s earning capacity, namely their ability to earn money in the future, is not capable of being shared.

Even after Waggott, some judges, like in E v L (Financial Remedies) [2022] 1 FLR 952 and CG v DL (2023) EWFC 82 (Fam), have said they still find the Rossi 12-month guide helpful. But they also acknowledge that context matters.

More recently, in Standish v Standish [2024] 2 FLR 966, the courts emphasised that the principle of sharing marital property shouldn’t be stretched too far. The judge warned that parties shouldn’t try to “matrimonialise” (i.e. turn into shared assets) things that are clearly non-matrimonial, such as income earned after the marriage ends. The Supreme Court in July 2025 overruled earlier suggestions that assets could become matrimonial simply through unilateral use for family purposes. It confirmed that the sharing principle applies only to matrimonial property and assets that originated as pre-martial or non-matrimonial (i.e. an inheritance) may become “matrimonialised” due to the parties’ intention and how the assets are treated overtime.

In OS v DT [2025] EWFC 156 (B), HHJ Hess held that savings from basic salary used to meet family expenses within the first 12 months post-separation could be included in the shared pot, in line with Rossi. However, bonuses, Restricted Stock Units (RSU’s) and a severance payment awarded within the 12 months following separation were classified as post-separation accruals and were only available on the basis of needs and would not be automatically shared. The decision is not citeable in relation to these findings around post-separation accruals and is only citeable in relation to child maintenance issues but it is possible comments from a leading judge may influence future cases.

In conclusion

There is no hard-and-fast rule, but recent cases show a clear trend:

• If you earn money through your own efforts after separation, the savings / assets built up may be argued to be non-matrimonial assets, which will not be interfered with other than is required to meet financial needs.
• The Rossi rule (which allows sharing of income for up to 12 months after separation) is still referenced, but many judges now see it as too simplistic.
• If the money is connected to the marriage (e.g. a bonus earned from work during the marriage but paid after) it is highly likely to be shared.

Clayton Miller, Senior Partner, notes that: “This is a complex area of law which can make a sizeable difference in a financial settlement, particularly in those cases where agreement for one reason or another isn’t reached well after the parties have separated. I still get surprised when the point is overlooked in the preparation of a case and/or in negotiations; it shouldn’t be.”

If the issues raised in this blog are relevant to you and you want to speak to one of our family law solicitors, please write to info@kmjsolicitors.com or call on 0203 709 6895.