Hidden assets and financial non-disclosure in divorce

The duty of full and frank disclosure

In financial remedy proceedings, both parties have an absolute duty to make full and frank disclosure of their financial position. This means disclosing every asset, every income source, every liability — even things you think are irrelevant, even things you think the other party already knows about.

This duty is not just a technicality. It underpins the entire financial remedy process. Without accurate disclosure from both sides, a fair outcome is impossible.

The duty continues throughout the proceedings. If your financial position changes after you file Form E — you receive an inheritance, a bonus, or sell an asset — you must update your disclosure.

Common ways assets are hidden

Spouses looking to conceal assets use a variety of methods. Common ones include:

Delaying income — asking an employer or client to delay bonuses, commissions, or invoices until after the settlement is reached.

Creating false debts — claiming to owe money to family members or associates that is actually fictitious.

Undervaluing assets — providing low valuations for property or business interests, or timing the CETV request for a pension to capture a low-point value.

Transferring assets — moving money or property to family members, friends, or offshore accounts to put them out of reach.

Undisclosed accounts — not mentioning bank accounts, investment accounts, or crypto wallets.

Business manipulation — diverting income through a business, inflating expenses, or temporarily depressing profits.

Cryptocurrency — failing to disclose crypto holdings, which can be difficult to trace.

Warning signs

Be alert to:

• A sudden drop in income or business profitability at the time of separation
• Uncharacteristic cash withdrawals from bank accounts
• New debts to family members or friends
• Reluctance to provide documents or answer questions
• Unexplained transfers to unknown accounts
• A lifestyle that doesn’t match disclosed income

What you can do

Send a thorough questionnaire

After receiving the other party’s Form E, you are entitled to send a questionnaire — a detailed list of questions and requests for documents. A well-drafted questionnaire is the primary tool for pursuing disclosure concerns.

Your questionnaire can ask for:

• Specific bank statements (all accounts, not just those disclosed)
• Business accounts and records
• Tax returns and self-assessment records
• Evidence of all property interests
• Explanations for specific transactions

Apply for third-party disclosure

If the other party won’t provide documents, or you have reason to believe they’ve hidden accounts or transactions, you can apply for disclosure directly from third parties:

• Banks and financial institutions
• Companies House (business records)
• HMRC
• Land Registry (property searches)

This requires a court order, but courts grant them where there is good reason to suspect non-disclosure.

Freezing orders

If you’re concerned the other party is dissipating assets — spending or transferring them to put them out of reach — you can apply for a freezing order (a Mareva injunction). This prevents them from dealing with specific assets without the court’s permission.

Freezing orders are serious steps and require evidence of a real risk of dissipation. They can be obtained without notice in urgent cases.

Forensic accountants

Where a business is involved, or where financial transactions are complex, a forensic accountant can be invaluable. They can:

• Analyse business accounts for manipulation
• Trace hidden transfers
• Provide an independent valuation of business interests
• Identify discrepancies between lifestyle and disclosed income

Drawing adverse inferences

If a party refuses to answer questions or comply with disclosure orders, the court can draw adverse inferences — assume that the undisclosed assets exist and value them accordingly. Courts are increasingly willing to do this where non-disclosure is clear.

What happens if non-disclosure is discovered

During proceedings

If non-disclosure is discovered during the proceedings, the court will take it seriously. The non-disclosing party is likely to face:

• A costs order against them
• An adverse inference against them in the substantive decision
• Possible contempt of court if they have disobeyed a court order

After an order is made

If non-disclosure is discovered after a financial order has been made, the order can be set aside and remade on the correct figures. The leading case is Sharland v Sharland [2015], in which the Supreme Court confirmed that fraudulent non-disclosure is a ground for setting aside a consent order.

The non-disclosing party may also face contempt of court proceedings and, in serious cases, criminal prosecution for fraud.

A note on DIY investigation

While it’s tempting to investigate yourself — looking through your spouse’s emails, accessing their accounts — this can backfire. Evidence obtained through hacking or unauthorised access to accounts may be inadmissible and could expose you to legal consequences.

Work through your solicitor. There are legitimate, court-sanctioned tools available that will produce evidence the court can act on.