Form E Explained: A Guide for Solicitors

What Is the Form E and When Is It Required?

Form E is the standard financial statement used in financial remedy proceedings in England and Wales. It is prescribed by FPR 9.14 and Practice Direction 5A. Both parties must complete and exchange a Form E simultaneously at the first directions appointment (FDA) stage.

The purpose of Form E is straightforward: to give both parties and the court a full picture of the matrimonial finances so that a fair financial settlement can be reached. It covers income, assets, liabilities, pensions, and living needs. Both parties must provide supporting documents - 12 months of bank statements, property valuations, business accounts, and pension cash equivalent value (CEV) statements.

Form E applies in divorce and civil partnership dissolution proceedings where either party has applied to the court for a financial order under the Matrimonial Causes Act 1973 or the Civil Partnership Act 2004. If financial remedy proceedings are not issued - for example, if the parties reach agreement without court involvement - there is no legal requirement to complete a Form E, though solicitors often use it as a framework for voluntary disclosure.

The form was last updated in April 2022. Earlier versions are sometimes still submitted in error, which can cause procedural complications. Solicitors should verify that their clients are completing the current version.

A Section-by-Section Breakdown

Form E runs to several pages and requires detailed financial information across multiple categories. Here is what each section covers, and where forensic accountants most commonly find problems.

Section 1: General information

Personal details, marriage or civil partnership details, children, and solicitor details. This section rarely raises forensic issues, but it establishes the factual framework - date of marriage, date of separation, and whether there are children whose welfare is the court's first consideration under s.25 MCA 1973.

Section 2: Financial details - capital

This is the section that generates the most forensic accounting work.

• 2.1 Real property: All property in which the party has an interest, including the matrimonial home, buy-to-let properties, land, and overseas property. The valuation provided should be current, not the purchase price or a historic desktop valuation. We cross-check against Land Registry data and recent comparable sales.
• 2.2 Bank accounts and savings: Every account in the party's sole name or joint name. We look for accounts that receive payments referenced on other bank statements but are not listed here. Missing accounts are a common indicator of incomplete disclosure.
• 2.3 Investments: ISAs, shares, unit trusts, bonds, and other investment holdings. Cryptocurrency should be declared here if held as an investment, though the form does not explicitly prompt for it.
• 2.4 Life insurance and endowments: Cash surrender values where applicable.
• 2.5 Money owed to the party: Loans to family, friends, or businesses. Director's loan accounts in credit (money owed by the company to the director) belong here.
• 2.6 Cash: Physical cash holdings. Rarely disclosed accurately in cash-intensive businesses.
• 2.7 Personal belongings: Jewellery, art, vehicles, and other high-value personal items.
• 2.8 Business interests: This is the section that causes the most difficulty. The form asks for a description of the business, the party's interest in it, and its value. For owner-managed companies, the "value" box is routinely filled in as "nil", "nominal", or with a figure that bears no relation to reality. A proper business valuation is almost always needed where there are significant business interests.
• 2.9 Pensions: All pension arrangements, with CEV statements. The CEV is the transfer value offered by the pension scheme. For defined benefit (final salary) pensions, the CEV often significantly understates the true value of the benefits. This is one of the areas where forensic accountants add the most value - by identifying pensions where a PODE (Pension on Divorce Expert) actuarial report is essential.
• 2.10 Other assets: Anything not covered above. Trust interests, options, deferred consideration from business sales, and tax refunds due all belong here.

Section 2.11-2.20: Income and earning capacity

Employment income, self-employment income, investment income, state benefits, and any other sources. For employed individuals, payslips and P60s should support the declared figures. For the self-employed, this section must be read alongside the business accounts and tax returns. Discrepancies between declared self-employment income and the income reported to HMRC are a significant red flag.

Section 3: Financial needs

Income needs (budget of monthly or annual expenditure) and capital needs (housing, lump sums). The expenditure budget is important because it sets the baseline for any maintenance claim. We sometimes review the declared living expenses against actual bank statement spending to check whether the budget is realistic.

Section 4: Other information

Contributions, conduct, and any other circumstances the party wishes to bring to the court's attention. This is where the s.25(2) checklist factors beyond financial resources and needs are addressed.

Section 5: Net assets summary

A calculated summary of assets minus liabilities. The accuracy of this section depends entirely on the accuracy of the inputs above.

Red Flags We Look for When Reviewing a Form E

When solicitors send us a Form E to review, we are looking for patterns that suggest the financial disclosure is not telling the full story. These are the red flags that most commonly prompt further investigation.

Income that does not match lifestyle. If declared income is GBP 45,000 but the family is living in a GBP 800,000 house, driving two new cars, and paying school fees, the arithmetic does not work. Either there is undisclosed income, undisclosed capital, or borrowing that should itself be disclosed.

Business interests valued at nil or nominal amounts. A trading company that generates revenue, employs staff, and occupies commercial premises has value. A declaration of "nil" or "GBP 1" for such a business is not a valuation - it is either an oversight or a deliberate understatement. We recommend a forensic business valuation whenever business interests are declared at a nominal figure.

Missing bank accounts. We compare the Form E against the disclosed bank statements. If account A shows regular transfers to an account that is not listed on the Form E, that account exists and should be disclosed. This simple cross-check catches omissions surprisingly often.

Director's loan accounts that do not add up. The director's loan account is a running tally of money flowing between the director and the company. Swings between credit and debit balances, particularly around the date of separation, can indicate manipulation - either extracting cash from the company before disclosure or inflating the balance to make the company look less valuable.

Pension values that seem low. A professional who has earned a good salary for 25 years and shows a total pension value of GBP 80,000 has either been remarkably unlucky with their pension choices or has not disclosed all their pension arrangements. We cross-reference pension values against earning history and employment records.

Property values that look pessimistic. Desktop valuations from online estimators are not reliable. Nor are "valuations" provided by a friend who happens to be an estate agent. We check declared property values against Land Registry comparable sales data and formal estate agent valuations.

Common Errors and Incomplete Disclosure

Not every gap in a Form E is deliberate. Many are the result of misunderstanding, carelessness, or bad advice. Here are the errors we see most frequently.

Only personal bank accounts listed. Business bank accounts are often omitted, either because the party considers them "company" accounts rather than "their" accounts, or because their solicitor did not prompt them to include them. Business accounts must be disclosed if the party has signing authority or a beneficial interest.

Historic property valuations. The Form E asks for current values, not purchase prices. A property bought for GBP 250,000 in 2010 may be worth GBP 450,000 today. Using the purchase price understates the matrimonial pot.

Gross pension CEV without funded status. A defined benefit pension with a CEV of GBP 400,000 might be worth substantially more in terms of the income it will produce in retirement. Conversely, a pension in a scheme that is underfunded may be worth less than the CEV suggests. The CEV alone, without information about the scheme's funded status and the type of benefits provided, can be misleading.

Omitting liabilities to connected parties. Loans from parents, siblings, or business partners are sometimes omitted, either because they are informal or because the party does not consider them genuine debts. If money has been provided, it should be disclosed whether or not there is a formal loan agreement.

Failing to update the Form E. The Form E is a snapshot of financial circumstances at a particular date. If those circumstances change materially between the FDA and the FDR (or between FDR and final hearing), the party is obliged to update the information. Failure to do so can amount to non-disclosure by omission.

When to Instruct a Forensic Accountant on Form E Issues

The answer depends on the stage of proceedings and the nature of the concerns.

Before FDA: If you already suspect non-disclosure or know that complex business interests are involved, early instruction is valuable. We can advise on what specific disclosure to request in the Form E directions, ensuring that the right questions are asked from the outset. This prevents the "drip feed" of disclosure that wastes time and costs.

After FDA, before questionnaire: If the Form E has been exchanged and raises red flags, we can review it and prepare a targeted questionnaire. We draft questions that focus on the specific weaknesses and inconsistencies we have identified, rather than the generic "please provide further information" requests that the other side can answer without actually disclosing anything useful.

Before FDR: The forensic accountant's analysis should be available before the financial dispute resolution appointment. The FDR judge gives a non-binding indication of the likely outcome, and that indication is shaped by the financial evidence available. If the forensic analysis is not ready, the FDR is less effective.

After final hearing: If material non-disclosure is discovered after a financial order has been made, the order can potentially be set aside under the principles in Sharland v Sharland [2015] and Gohil v Gohil [2015]. We can investigate suspected non-disclosure at any stage, including post-order.

For a detailed discussion of how we trace assets that have not been properly disclosed, see our article on hidden assets in divorce.

Preparing Your Client to Complete the Form E

The better your client's own disclosure, the stronger their position. Here is the document checklist we recommend solicitors work through with their clients before completing the Form E.

• Bank statements: 12 months' statements for every account - current, savings, joint, sole, and business accounts where they have signing authority.
• Property valuations: Formal estate agent valuations, not desktop estimates. At least two independent valuations for the matrimonial home.
• Pension CEV statements: Up-to-date statements from every pension provider. For defined benefit schemes, ask the scheme administrator for a CEV specifically for divorce purposes.
• Tax returns and SA302s: Three years' returns and HMRC-issued SA302 tax calculations for anyone who is self-employed or has investment income.
• Company accounts: Three years' statutory accounts for any business in which the party has an interest, plus management accounts for the current year.
• Mortgage statements: Current mortgage statements for all properties, showing the outstanding balance and monthly payments.
• Payslips: Three months' payslips for employed individuals.

The more thorough your client's disclosure, the less the other side can challenge and the less time the court will spend on disclosure disputes. Incomplete voluntary disclosure invites questionnaires, which cost money and delay proceedings.

How We Report on Form E Deficiencies

When we review a Form E, we produce a structured report for the instructing solicitor. This is an advisory document, not an expert witness report. It is covered by litigation privilege and is not disclosed to the other side unless the solicitor chooses to do so.

Our report identifies:

• Gaps in disclosure: Assets, accounts, or income sources that should have been declared but were not.
• Inconsistencies between sections: Where the income declared does not support the lifestyle described, or where business interests are inconsistent with Companies House filings.
• Areas requiring further investigation: Specific issues that warrant forensic analysis - bank statement reconstruction, lifestyle analysis, or a formal business valuation.
• Recommended questionnaire: Draft questions for the solicitor to submit, targeting the specific weaknesses and gaps we have identified.

If the issues escalate - for example, if the questionnaire responses reveal further non-disclosure - we can then be formally appointed as a single joint expert or party-appointed expert under FPR Part 25. The advisory work already done informs the formal instruction, saving time and costs.

We work alongside the solicitor and, where relevant, the client's personal tax adviser and pension actuary. The Form E is the starting point for financial remedy proceedings, but it is rarely the whole story. Our role is to identify what is missing and make sure the court has the complete financial picture.

For definitions of technical terms used in this guide, see our glossary. To discuss a Form E review or any other matrimonial finance matter, contact us or call 0161 832 4451.