Financial Settlement Where Assets Are Located in Multiple Jurisdictions
Many couples have assets overseas, but the division of these assets can be difficult to navigate when it comes to divorce and financial settlement. Regardless of whether you have bought a holiday home in the sun, or both partners own businesses in their home country, such property will need to be dealt with as part of the financial settlement process.
Defining property for the purposes of financial settlement
When ‘property’ is discussed in this context, it refers to homes, land or any financial assets such as bank accounts, investments or a share in a business. The property may be held solely or in joint names, but all property must be disclosed as part of the financial settlement process.
How are assets held overseas valued?
Any assets that either party holds overseas will be considered in the divorce settlement. A value for the asset must be determined, but how this is achieved will depend on the nature of the property.
Arguably, the most straightforward property to value is any banking or investment account. The partner who holds the account can simply produce a statement demonstrating the value.
For houses, apartments, buildings or land, you will need to obtain a valuation from a qualified surveyor in the country where the property is located. Parties to the divorce may wish to agree on the professional they will use beforehand to avoid a dispute about the valuation at a later date.
If you have shares in a foreign business, you may need to instruct an accountant qualified in the country where the business operates to value it.
How are assets held overseas divided in divorce?
When you are divorcing in the UK, after the asset has been valued, it will be treated following the same legal principles for financial settlement as all other assets. The law in England and Wales does not seek to provide a percentage share to each party but to provide a fair settlement.
Many factors can influence how assets might be divided and whether the division of assets should be in favour of one spouse over another. Factors that may affect the division of assets include:
- whether assets were acquired before the marriage
- the length of the marriage
- the housing needs of the parties
- any children that are involved
- the earnings or earning potential of each of the parties
It is essential that you have specialist advice on your individual circumstances. We can advise you to ensure that your interests are properly represented.
I suspect that my spouse has not disclosed assets held abroad, what can I do?
In many cases, if one spouse has lived or worked abroad during a marriage, they may fail to disclose assets held overseas. We can help you to raise your concerns and make enquiries to determine whether this is the case.
Initially, we will raise a formal request with your spouse’s solicitor setting out the nature of your suspicion. Where this is not successful, we can seek an order from the court. Depending on what the assets are, we can also assist you in appointing a forensic accountant. A forensic accountant will analyse all of the assets that have been disclosed to look for inconsistencies and errors which may indicate that assets are being held overseas.
If your divorce has been finalised and it later becomes apparent that your spouse has been hiding assets overseas, the court may reopen your financial settlement.
What happens if undisclosed assets overseas are uncovered?
Where one party deliberately hides assets during financial settlement, the consequences can be significant. The court has broad powers to penalise the party wilfully hiding assets and may reduce their overall financial settlement or even impose a custodial sentence.
How can I enforce a court order overseas?
When you and your spouse agree about the division of your assets, we can then apply to have the agreement made into a court order. It is essential to craft the settlement or court order to ensure that it complies with each foreign jurisdiction’s requirements.
If your spouse does not comply with the terms of the court order concerning assets held overseas, enforcement can be challenging. The approach we will take will depend on the country where the assets are held. Many countries have agreements in place to recognise financial court orders from UK courts, but others do not. We can advise you fully on the steps we need to take to ensure you receive what is due to you under your financial settlement agreement.
Contact Our UK International Divorce Solicitors at our Manchester, London and Birmingham offices
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.