Capital gain on shares held personally: what happens in the event of a divorce?

What was the case about?

A couple, married since 2002 under the statutory matrimonial regime, separated in 2022. Shortly after the marriage, the husband incorporated a private limited company using his own funds. The shares in that company therefore formed part of his separate property.

Both spouses worked full-time for the company and received remuneration for their work. During the marriage, the value of the shares increased.

During the liquidation and distribution of the marital assets following the divorce, a dispute arose over this increase in value. The central question was: who is entitled to the capital gain on the separate shares that accrued during the marriage?

What did the Constitutional Court decide about the capital gain on separate shares?

The Constitutional Court starts from an important distinction.

Shares financed with separate funds – for example, funds held before the marriage or assets received through an inheritance or gift – remain, in principle, the separate property of that spouse.

The capital gain on those shares likewise retains, in principle, its separate character.

However, that is not the end of the matter.

Professional income forms part of the marital community

Under the statutory matrimonial regime, professional income forms part of the marital community. Where one spouse carries out their professional activity through a company they own separately, this should not, from a matrimonial property perspective, put the marital community in a less favourable position than if the same professional activity had been carried out “outside” the company.

In concrete terms, this means that compensation may be payable to the marital community. This compensation corresponds to the income that the community could reasonably have expected to receive had the professional activity not been carried out through the company.

An important nuance is that this compensation may, in principle, also include the capital gain on the shares where the increase in value resulted from the professional activity carried out during the marriage.

What does this mean for married entrepreneurs in the event of divorce?

Many entrepreneurs carry out their activities through a company they own separately, such as a management company. For them, the judgment sends an important message: choosing to operate through a company does not automatically change the rules of the statutory matrimonial property regime.

Even where the shares remain separate property, the marital community may therefore be entitled to financial compensation if the value of the shares increased during the marriage as a result of the professional activity carried out by one of the spouses through the company.

When the marital assets are liquidated and distributed following a divorce, this compensation may then become part of the marital community. In practice, the capital gain will therefore generally be shared equally between the spouses.

Particularly relevant when income is retained in the company

The judgment is particularly relevant for married entrepreneurs and professionals who leave some or all of their professional income in their company instead of distributing it as salary, directors’ fees or dividends.

In other words, your shares may remain your separate property. However, if you retain part of your professional income in your company during the marriage and this results in an increase in the value of your shares, the marital community may, upon dissolution of the matrimonial regime, claim compensation.