Changes to the Capital Gains Tax Regime
15th October, 2019
Kerry Sawyer looks at the changes expected to be reflected in the Finance Bill 2020 and become UK law in April 2020.
‘Bird nesting’ is an arrangement where divorced or separating parents take it in turns to live with the children who remain in the family home. The parents do the moving and experience the inconvenience of separation.
It is unlikely that a court in this country would force this arrangement, but courts in the US and Canada have done in extreme cases, when it was imperative to put the needs of the children first. It may become more common as ‘sharing’ arrangements become the norm.
The single and compelling advantage is that it provides continuity and stability for the children; the parents put their children’s wellbeing first and it avoids the children being treated like frisbees.
It is an arrangement that may place a heavy burden on the parents in terms of logistics, practicalities, or simply being free to move on emotionally after a separation or divorce.
However it is certainly an alternative option worth considering, particularly where couples are in mediation. It is very much an out of the box solution but given the right circumstance and the right family, it can work.
Making it work
It will be necessary to set boundaries and reach agreements about the household chores. Who will mow the lawn, fill the fridge, pay the bills, or put the bins out? And what about the bed? How will the bed be shared if there is no spare room? Who will wash the sheets and make the bed up at ‘changeover’, so that one parent is not providing a hotel service for the other?
It may be a financial necessity to keep the house as the parents stay with friends or family when the stays with the children, if they do not have the financial resources for two homes. It may be a sensible solution where, say, dad has moved some distance away and rather than have to spend on hotels (which may be unaffordable) mum moves out at the weekend so the children can spend time with him.
Other couples may have the financial luxury of being able to buy or rent new homes in order to keep the family home going once they separate. The arrangement may happen naturally if they have been unable to sell the home or prefer to wait to sell until the market is better.
My advice would be that if parents are separating, this is an option they should consider, at least for a transitional period. A considered discussion will be required to really think through all of the pros and cons, with perhaps a written agreement about all of the arrangements that have been agreed on. Mediation would be a great way to help couples explore possibilities and iron out any issues.
For it to really work, it is essential for the parents to get along tolerably and for there to be a good level of trust between them, as well as a strong desire to find the best option for their children. Ideally, being able to cooperate on a reasonable level is be something all separating parents should take responsibility for.
Prioritise the children
A bird nesting arrangement may be difficult as a final solution. It may give the children false hope that their parents will get back together. After all, change is inevitable and children can be surprisingly adaptable as long as they know they are loved.
The family will evolve and there will be new partners and, in time, new families. I always think that a best case scenario (if it is feasible) is for parents to commit to living close by so the children can enjoy frequent and natural contact with both parents, combined with minimal disruption. Research suggests that living beyond 20 minutes away from the children can lead to parenting time becoming more formal and scheduled, and less likely to work.
Partner, Sarah Duckworth’s article was published by Private Client Adviser online on Monday 7th March 2016.
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