Monetary compensation during the division of property helps when the thing cannot be divided in kind, for example, a one-room apartment. Divorce of spouses, inheritance of common property by several heirs, these are just a few situations when it is not possible to use common property jointly, then the question of compensation for the share arises.
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In what cases is it paid?
As a rule, spouses resort to paying monetary compensation in cases where joint ownership includes so-called indivisible property or property the division of which cannot be equal.
The legislation of the Russian Federation clearly defines which property is joint and must be divided in the event of a divorce, and which is personal and is not subject to divorce.
According to the provisions of family law, all property acquired during marriage (from the moment of marriage) is subject to division - Art. 34 RF IC. This could be...
- real estate,
- vehicles,
- movable property (equipment, furniture, household items),
- funds (cash, bank deposits, savings),
- property rights and obligations,
- debts.
is not subject to division between spouses (and therefore does not require payment of monetary compensation):
- Personal property acquired by a husband or wife before marriage or after divorce;
- Property that was received by one of the spouses as a gift or by inheritance;
- Funds (non-cash and cash) deposited by spouses into a bank account in the name of a minor child;
- Property that is needed to meet the needs of a minor child;
Recovery of monetary compensation is also impossible if the man and woman were not married, but lived together in a so-called “civil marriage” - cohabitation. Family law does not regulate property rights and obligations arising from such relationships (see “Division of property in a civil marriage”).
Ways to receive monetary compensation
Let's look at what options exist in practice:
- The issue of distribution of property and payment of monetary compensation in the event of an unequal division can be resolved by the spouses independently - by concluding a marriage contract between husband and wife or an agreement on the division of joint marital property. A written document may contain any voluntarily reached agreements: provisions on the size of shares (shares can be either equal or unequal), on the distribution of property according to shares, on the amount of monetary compensation, on in-kind compensation, etc.
- If it is impossible to peacefully, voluntarily resolve the issue of division of property and payment of monetary compensation, the issue is resolved in court . According to the general rule provided for by family law, the shares of spouses are considered equal - by virtue of Art. 39 RF IC. But if it is impossible to divide the property equally, the court resorts to assigning monetary compensation: the spouse to whom all the property or most of it is transferred is obliged to pay the second spouse an amount of money equivalent to his missing share.
Thus, if the spouses do not agree on the procedure for dividing property and the amount of monetary compensation, the dispute is referred to the judicial authority. To calculate the payment, the court appoints an appraisal examination of the joint property - and, based on the assessment results, makes a decision on the procedure for dividing the marital property and awarding compensation to one of the spouses.
The spouse loses the right of ownership of the property for which he received compensation and can no longer demand the right to use, own, or dispose of it.
Expert opinion
Dmitry Nosikov
Lawyer. Specialization: family and housing law.
In addition to monetary compensation, Russian legislation does not prevent the award (judicial or voluntary) of other ways to eliminate the disproportionality of shares, for example:
- Provision of services by one spouse to another;
- Performance of work by one of the spouses for the benefit of the other;
- Assignment of the right to temporary use of property;
- Transfer of equivalent personal property as compensation by one of the spouses.
If the spouses agree on this form of compensation, it will happen. For example, a husband undertakes to complete a house for his wife and child, and in return will receive a family car. Or the spouses will make an exchange of property: instead of money, the wife will give her husband a garden house in SNT and a laptop, and the husband will give up his share in the joint apartment. There are many options. The most important thing is that they suit both spouses and do not infringe on the rights of one of them. Then no one will have questions regarding the compensation section.
Legal instruments
Parties can protect themselves by correctly using the appropriate legal tools:
Protection | Description |
Penalty | Failure to fulfill obligations will result in the violator paying a penalty. The amount of the fine is determined in court. On average, it is 30-40% per year of the total amount. |
Disclaimer | According to the provisions of the Civil Code, the parties are obliged to fully comply with the terms of the agreement. Unfortunately, failure to fulfill the agreed obligations by one of the spouses will not be a reason to terminate the validity of the agreement for the other. Helps in solving the problem of 450 Art. Civil Procedure Code, which deals with unilateral refusal of the transaction. The aggrieved party will legally be able to stop fulfilling the terms of the agreement. Everything will return to the starting point at the time of writing. Next, the spouses can draw up a new agreement or go to court to resolve the dispute. |
Surety | The guarantor is responsible for the fulfillment of obligations by the person who received a large share of the property. In case of non-payment of funds, he will be equally involved in repaying the debt with the payer. Then the citizen who guarantees for the spouse will become his creditor. If the funds are not returned, then filing a claim in court is permissible. In the future, bailiffs will take charge of the debtor. |
Determination of monetary compensation
The amount of compensation cash payment can be determined in one of the following ways:
- By agreement between husband and wife.
- By the tribunal's decision.
However, before calculating the amount of payment, it is necessary to assess the value of the marital property that is subject to division. The expert conducts an inspection, studies documents, analyzes the market - as a result of which he compiles a report on the value of the property, taking into account wear and tear or improvements made. If each spouse conducted an assessment, the results of which differ significantly, you will have to apply to the court for a forensic examination.
After the assessment, all divisible property is divided into equal parts, and property that cannot be divided becomes the property of one of the spouses . After this, it remains to determine which of the spouses got the largest part - he is assigned monetary compensation. The amount of compensation is half the difference in the value of the property received by each spouse.
Example: The total cost of family property (car, household appliances) is 800 thousand rubles. A car worth 500 thousand rubles becomes the property of the husband, and furniture and household appliances with a total value of 300 thousand rubles become the property of the wife. The difference in the size of the shares is 200 thousand rubles, the amount of compensation that the husband must pay to his wife is equal to half of this amount - 100 thousand rubles.
If the amount of compensation is small, it can be assigned by the court without the consent of the recipient and the payer, but if we are talking about a large amount, it must be agreed upon by the court with the parties. The court also takes into account the interest of each spouse in receiving this or that property - the degree of such interest is determined individually, according to the circumstances of the case and the assessment of these circumstances by the court.
Taxation of monetary compensation
According to the law, all income of citizens is taxed. Cash compensation also applies to taxable income, which means that deductions must be made from it in favor of the state. But if the property for which monetary compensation was received was owned for at least three years, the owner can exercise the right to a tax deduction and thus avoid taxation of the compensation payment.
To qualify for a tax deduction, property must meet two conditions:
- Its cost should not exceed 1 million rubles. If the price of the property is above 1 million rubles, then 1 million rubles are deducted from the taxable amount, and personal income tax of 13% is charged on the balance;
- Spouses must have owned the property continuously for at least 3 years.
Example: When dividing marital property, the husband received a car valued at 500 thousand rubles. The compensation due to the wife was to be 250 thousand rubles, from which tax was to be deducted. However, if the wife proves that the car was purchased four years ago, it turns out that she did not receive any income and does not have to pay tax.
To apply the right to a tax deduction for their own purposes, the spouse needs to formalize the transfer of compensation in the form of a purchase and sale agreement with the second spouse. Thus, one of them acquires personal ownership of property that was joint, and the other receives a payment and the opportunity not to pay personal income tax.
Are taxes paid?
If one of the ex-spouses receives compensation after the division of property, in accordance with Article 210 of the Tax Code of the Russian Federation, this can be regarded as income on which tax must be paid. However, you can legally avoid paying taxes by using tax deductions.
To be able to use this mechanism to your advantage, it is necessary to present the transfer of compensation as the result of a sale and purchase between the former spouses. As a result, one of the participants acquires an asset that was previously considered joint property into personal ownership, and the other receives a payment. In this case, there is no need for personal income tax.
The right to deduction can be obtained if:
- The price threshold should not exceed one million rubles.
- The period of time the assets are owned by the spouses exceeds three years.
How to draw up a compensation agreement?
If a husband and wife decide to divide joint property peacefully and independently, they should enter into an agreement, which involves the following actions:
- If there are no disagreements between the spouses regarding the assessment of the value of the property and the amount of compensation, they can immediately begin to draw up a written document (either independently or with the assistance of a competent lawyer), after which they can notarize the document;
- If a dispute arises between spouses regarding the value of jointly acquired property and, as a consequence, the amount of compensation payment, they must first contact an expert who will assess its value, after which the spouses will be able to calculate the amount of payment due in the event of an unequal division of property. All agreements reached are also included in a written document, subject to notarization and subsequent execution.
Example:
Yuri and Galina decide the fate of their joint property. The couple acquired a car, an apartment, furniture, equipment and a garden house outside the city during their marriage. The couple knew an appraiser, whom they hired to appraise the property. According to the report, this is what happened:
- Volvo car - 350,000 rubles;
- 2-room apartment in Voronezh - 2.5 million rubles;
- Furniture and appliances - a total of 140,000 rubles;
- Garden house - 850,000 rubles.
Yuri keeps his car, garden house and half of the furniture. Galina gets an apartment and half the furniture with appliances. The difference is 1.3 million, and the total amount of payment to the second spouse is 650,000 rubles. This is exactly the amount of compensation that Galina will pay in favor of Yuri during the division of property.
Below you can see an example of an agreement:
Features of drawing up an agreement
The agreement is drawn up by the spouses and must contain the following information:
- information about the parties to the agreement;
- status of the spouses at the time of drawing up the document;
- the essence of the agreement;
- list of jointly acquired property (with a detailed description);
- division of property;
- signatures of the parties and date of preparation.
The document contains a list of personal property and, if necessary, compensation is prescribed. Each page of the agreement is signed, then everything is stitched together. It is advisable to have the document certified by a notary, as he will guarantee that the contract is written honestly and voluntarily, and will also be able to provide examples and help avoid mistakes. Sample agreement between the parties:
How to recover monetary compensation through court
Despite the fact that an out-of-court method of dividing marital property is considered preferable (due to efficiency, affordability and the ability to independently choose the method and procedure for distributing property benefits), turning to a judicial institution still remains a popular and common way to resolve a property dispute. Spouses can also go to court if an agreement was concluded between them on the division of marital property or a marriage contract, but the terms of the agreements were not fulfilled voluntarily.
The court orders an expert assessment of the matrimonial property, based on the results of which it divides the property and determines the amount of monetary compensation, as well as the period during which it must be paid, taking into account the financial situation of the parties.
The court decision made as a result of the proceedings is subject to mandatory execution. In case of non-compliance, the parties have the right to contact the Bailiff Service and initiate enforcement.
Procedure
So, if it is impossible for the spouses to independently resolve a property dispute, it is referred to a judicial institution in accordance with the rules of jurisdiction.
The procedure will be approximately as follows:
- The spouse interested in the division of marital property prepares and files a claim in court for division of property and payment of compensation, attaching supporting documents;
- The court considering the claim examines the submitted documents, listens to the arguments of the parties, and orders an expert assessment to determine the market value of the property. Payment for the expert's services is borne by the plaintiff;
- The report on the assessment of the value of property serves as the basis for calculating the compensation payment due to the spouse whose share during division turned out to be less than that of the second spouse;
- The court makes a decision specifying the procedure for dividing marital property, the amount of monetary compensation, the timing and procedure for its payment.
Compensation for the difference when dividing property with the help of 3 persons
You can receive compensation through 3 third parties. It is enough for spouses to indicate this point in the agreement:
Protection | Description |
Pledge | The party that receives a larger share will be required to provide certain property as collateral, the value of which is approximately equal to the compensation payment. |
Deposit | One of the spouses transfers a pre-agreed amount to the other. If the contract was violated, the funds are not returned, and the property remains shared. If the conditions are fulfilled in good faith, the deposit will be included in the compensation payment. |
Bank guarantee | The bank becomes the guarantor of fulfillment of the terms of the agreement. The fees for banking services are quite high, so the legal instrument is relevant only in the case of dividing commercial property (income-producing real estate). Bank employees will check the spouse’s ability to pay the bill and apply measures permitted by law to encourage him to fulfill his obligations under the agreement. |
Lawsuit
The statement of claim is drawn up in strict accordance with the procedural law (Articles 131 and 132 of the Code of Civil Procedure of the Russian Federation). The form and content of the statement of claim must be as follows:
- Document header:
- Name, address of the judicial institution;
- FULL NAME. plaintiff and defendant, addresses, contact details;
- Cost of claim (half the value of the disputed property (equivalent amount of money) claimed by the plaintiff);
- Title of the document: “Statement of Claim for the Division of Joint Marital Property and Payment of Compensation”;
- Statement of the circumstances of the case:
- Date, place of marriage and divorce;
- Information about minor children (full name, date of birth, place of residence);
- A list of disputed property with a detailed description of each property and indicating the date of acquisition, ownership (personal, joint), estimated value;
- Reference to the norms of family and civil procedural legislation;
- Request to the court: to divide the joint marital property (indicate how: which property should become the property of the plaintiff, which should become the property of the defendant), order the payment of monetary compensation in case of unequal division;
- List of documents that are attached to the claim;
- Date of;
- Signature.
Documentation
The following documents must be attached to the claim:
- copies of the statement of claim for the court and the other party;
- copies of marriage, divorce, birth certificates;
- a receipt confirming payment of the state fee for filing a claim;
- title and technical documents for property that is subject to division;
- appraisal documents confirming the value of the property that is subject to division.
State duty
The state fee for filing a claim for the division of marital property is calculated based on the cost of the claim according to the formula established by Article 333.19 of the Tax Code of the Russian Federation, consisting of a fixed amount and an interest rate. The higher the value of the disputed property, the higher the state duty. However, the law establishes a minimum (400 rubles) and maximum (60 thousand rubles) amount of state duty.
For more information on how to correctly calculate the amount of the state duty, read the article “State duty for the division of property during a divorce.” If you have any additional questions, please contact the lawyers of our portal for a free consultation.
Payment details can be obtained from the office of the court where the claim is filed. You can make a payment through a post office or bank cash desk, a bank terminal, or an Internet banking service. A receipt for payment of the state fee must be attached to the statement of claim, otherwise the claim will be abandoned.
Deadlines
It is possible to make a division of marital property (and assign a compensation payment in case of unequal shares) during marriage, during divorce proceedings, or after divorce.
The law establishes a statute of limitations for the division of property between divorced spouses - 3 years , which begins from the moment when one of the co-owners of the property learned of a violation of his property rights (Clause 7 of Article 38 of the RF IC).
Spouses often ask about the length of the trial. But it is impossible to give a definite answer to this question - in some cases the trial ends in two months, in others it drags on for six months or longer. It’s good if the spouses are ready to reach a compromise in the legal process (for example, by concluding a settlement agreement), then the court’s decision will be made sooner.
Arbitrage practice
Before going to court, spouses should discuss (think about) and thoroughly weigh all the pros and cons of legal proceedings - the cost of time, money, and human resources. And if the final result - a decision on the division of marital property and the optimal amount of monetary compensation - can be achieved without a trial, it is better to take independent actions. But if you cannot do without a trial, preparation for the trial should be maximum - a competent statement of claim, a complete package of documentation, a well-thought-out legal position. If you need legal support, please contact the lawyers of our portal for a free consultation.
It would also be useful to familiarize yourself with examples of judicial practice in similar cases. Such illustrative examples can be viewed on the website of the judicial institution to which you plan to file a claim, or any other court.
Below are also examples of consideration of cases on the division of property and the assignment of compensation payments.
Example 1
Throughout their married life, the husband and wife lived in an apartment that was purchased by the husband's parents for the young spouses. But since the apartment donation agreement was not drawn up, the apartment actually and legally belonged to the husband’s parents. Therefore, during the divorce, the division of real estate was not carried out. No division of other property was carried out; all furnishings - furniture, household appliances - that belonged to the couple remained in the husband's ownership, since the child remained to live with his father. The court ordered the husband to pay his wife half the value of all jointly acquired property.
Example 2
Several years before the divorce, the wife sold a 1-room apartment that belonged to her personally. Having added joint money to the proceeds from the sale, the couple bought a 3-room apartment, formalizing the transaction and the ownership right to the wife. However, after the divorce, the husband filed a lawsuit to divide the apartment. Having studied the documentation, the court found that the cost of the 1-room apartment sold by the wife was 60% of the cost of the purchased 3-room apartment. Therefore, 60% is the wife's personal property, and the remaining 40% is joint marital property, which is subject to division in half. The husband’s refusal to register ownership of the apartment does not matter - according to Art. 34 of the RF IC, everything acquired by spouses during marriage belongs to them on equal rights. Thus, by a court decision, the wife remained obliged to compensate her husband 20% of the cost of the apartment
What to do if the defendant does not pay compensation?
The court decision on the appointment of compensation payment must establish the procedure and period during which the defendant must transfer the amount of money to the plaintiff. The compensation payment may be a one-time payment, or may be paid in installments (in this case, the deadline for payment of the next payment will be the last day of the month).
If the defendant does not comply with the court decision voluntarily, you need to contact the court that made the decision and obtain a writ of execution . With this document you need to go to the Bailiff Service (at the defendant’s place of permanent residence) to initiate enforcement proceedings to force the collection of compensation payments.
Conclusion on the article:
- During a divorce, the joint property of the spouses must be divided equally.
- If this is not possible, the husband pays monetary compensation to the wife, or vice versa. Spouses can agree on another form, for example, the provision of services or the transfer of personal belongings.
- The amount of compensation depends on the valuation of the property.
- Spouses can draw up a marriage contract or an agreement on the division of property - a contractual procedure. You can not conduct an assessment at all, but agree verbally. If a compromise is not found, the issue of compensation will be decided by the court.
- The recipient of compensation pays income tax - 13% personal income tax.
- The limitation period for filing a claim for division of property is 3 years from the date of violation of the rights of the spouse.
- The statement of claim is filed with the court at the place of residence of the defendant or at the address of the disputed property. The costs of the judicial assessment are borne by the plaintiff.
- The court issues a decision determining the amount of compensation and frequency of payments. The writ of execution is included in the SSP.
The division of property is always related to the personal interests of the spouse. Not everyone is satisfied with the amount of compensation. It happens that the spouse’s personal funds were invested during the marriage, but were not taken into account when dividing property. And documents are not always saved. Or the spouse cannot pay compensation - he simply does not have the money. There is a need to write an application for deferred/installment payments. Judicial procedure requires compliance with procedural deadlines, filing claims, conducting assessments, taking into account jurisdiction and much more. Not all spouses have the extra time and energy to resolve the situation. Our website's lawyers are ready to provide a free consultation. From it you will learn about the division of property, calculation of compensation, drawing up statements, claims and agreements, and property valuation. Call us or leave questions in the chat.
Watch a video about 2 ways to calculate compensation when dividing marital property:
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Author of the article
Irina Garmash
Family law consultant.
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Division
The process of dividing property is carried out according to several scenarios:
- The parties themselves resolved the property dispute and drew up an appropriate agreement.
- Monetary compensation for the division of jointly acquired property is determined in court.
The best option is to solve the problem yourself. It will be possible to avoid lengthy disassemblies and payment of state duties. If the parties cannot determine the compensation payment themselves, then they will need to file a claim in court. When dividing property, not only property (movable, immovable), but also debt obligations are taken into account. If it is not possible to equally divide the property, one of the parties who received a larger share will be required to pay the difference.
The division of disputed property is the most labor-intensive process. For example, a husband sold a jointly owned car and bought things for his wife. Wearable clothing is not subject to division, but money from the family budget is invested in it, therefore, the spouse has the right to demand compensation for losses. If there are receipts confirming the fact of sale/purchase, the court will approve the plaintiff’s petition.
Situations where one of the spouses did not work while married are considered no less difficult. According to lawyers, such a nuance is absolutely not important. A wife who creates comfort in the home and feeds her husband and children has the right to demand her share of the property if it falls under the category of “jointly acquired property.”
Things are somewhat different if you have common children. The court is obliged to protect the interests of minor children, so the mother may be given a large share of jointly acquired property. Such cases are not something special in judicial practice. Husbands even have the right to transfer an apartment or other property to a child in order not to pay alimony.