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Capitalisation

Capitalisation

This is a method of working out a lump sum to provide for income requirements in lieu of spousal maintenance, sometimes known as alimony. It is calculated by reference to a range of financial and actuarial assumptions (most commonly the Duxbury assumptions) to provide a stream of income to replace maintenance payments for the rest of the recipient’s life. For example, the stronger financial party might pay a sum of £100,000 to the weaker financial party aged 60 to provide them with an income of about £10,000 a year for the rest of their life. It enables clean breaks in financial matters between spouses.