The treatment of illiquid assets on divorce

On 24 July 2026, the Court of Appeal overturned a High Court decision on the division of assets on divorce. Although the parties’ total wealth had been shared equally, the husband received 70% of his share in illiquid assets — assets that can’t be readily converted into cash — compared with only 30% of the wife’s share.

In Culligan v Rosemin-Culligan [2026], the Court of Appeal held that both parties should retain a share of the illiquid assets, meaning they remain financially connected after divorce.

The illiquid assets — shares in a private company — were classified as ‘risk assets’ because their value was subject to “significant uncertainty”. The High Court judge directed that the wife should receive £4.1m of the shares, plus £9.5m in liquid assets, while the husband would receive £9.6m in illiquid assets and only £4.1m in liquid assets. The husband argued that the shares should have been divided equally.

The parties were in their 60s, married in 1992 after seven years’ cohabitation, with three adult children. Their total wealth of £27m, net of tax and liabilities, was accrued during the marriage and it was accepted that it should be shared equally. However, while the overall value was divided equally, the type of assets — and the risks attached to them — were not.

Expert evidence confirmed that the husband’s shareholding was “non-marketable” and that he couldn’t extract “any liquid capital” from the company. Applying Wells v Wells [2002], the judge noted that the law does “not mandate the equal division of all assets” but requires a “fair division of ‘both copper-bottomed assets and the illiquid and risk-laden assets’”. He concluded that the wife’s share of the illiquid assets should be kept to a minimum.

‘Wells sharing’ describes an arrangement whereby divorcing parties retain joint ownership of illiquid or risk-laden assets to be realised at a future date. This contrasts with the courts’ general preference for a clean financial break wherever possible.

The Court of Appeal emphasised that “the nature and quality” of assets must be considered and that section 25A of the Matrimonial Causes Act 1973 requires the court to consider whether a clean break is appropriate.

Is Wells sharing a last resort?

It has generally been assumed that Wells sharing should be treated as a last resort because it conflicts with the court’s duty to consider a clean break. In Versteegh v Versteegh [2018], Lord Justice Lewison observed that where a judge “can make no more than a wild guess at the value of an asset, and it is common ground that the asset in question should not be sold, Wells sharing may be the only option left.”

Lord Justice Moylan, giving the lead judgment in the Culligan case, disagreed. He concluded: “In my view, there is no principle that Wells sharing is only to be included as part of an award as ‘a last resort’ nor, indeed, that it should only comprise a minority element.”

He acknowledged the advantages of a clean break but held that one was not fairly achievable in this case. The court therefore needed to decide what proportion of the shares each party should retain.

The wife’s counsel raised concerns about her future dependence on the husband’s compliance and provision of financial information. However, Moylan LJ noted that the husband’s relatively small shareholding limited his ability to act contrary to her interests, reducing the risk.

Moylan LJ also considered that the wife’s arguments about a clean break were irrelevant because a clean break was unachievable in any event. The real issue was whether the wife should receive 50% of the shares rather than the 30% allocated at first instance.

He concluded: “I can see no justification for dividing the… shares (or their value) other than equally between the parties. Any other distribution would not, in my view, effect a fair balance of risk and illiquidity.”

As a result, the wife received 50% of the shares, and the family home, valued at £7m and which she had wished to retain, was ordered to be sold to provide liquid capital for the husband.

This case illustrates that achieving a fair division of assets on divorce may sometimes require former spouses to remain financially connected. For those seeking a complete financial separation, this may be unwelcome — but where assets are illiquid and risk-laden, it may be unavoidable.