If you’re thinking about a divorce or separation, it might be that you have ‘complex’ financial matters to be dealt with. For example, pensions, businesses and high net worth assets. You might also have assets and capital that are located in another country.
Foreign assets can very often add another layer of complexity to proceedings. Here we’re taking a look at the unique considerations that arise with foreign assets during a divorce, and how legal advice can help you avoid some common pitfalls.
How are any foreign assets divided?
On the face of it, if they’re deemed as being a part of the marital financial ‘pot’. This means any foreign assets are divided in the same way as those based in England and Wales.
Sometimes though, there can be difficulties, especially when it comes to tracing and valuing foreign assets, and navigating international law whilst trying to do so. The fact is that certain assets will be subject to different rules. For example, dealing with a property abroad will require different considerations to those of companies, trusts, pensions or savings and investments.
Ultimately, it’s not simply a question of how any foreign assets will be divided – there’s often a lot more to it.
Jurisdiction and enforcement
This is something that needs to be established early on in negotiations. Imagine if you and your soon to be ex spouse have come to an agreement about any foreign assets, only for you to discover that it’s not enforceable under the law in the country the asset is located in.
Whilst the English courts can make orders in respect of foreign assets (there are some exceptions, but that’s another blog in itself), that’s only one part of the puzzle. Ensuring that the decision of an English court will be enforceable in another country is another thing entirely.
This is just one of the reasons why seeking expert legal advice as soon as possible is absolutely essential before making any agreements about the future.
There are a number of different assets that can be held abroad. Given that it’s not as unusual as it once might have been to invest in a ‘holiday home’ or other property abroad, the issue of property is worth a particular mention. And there are a few things to think about.
Firstly, you’ll need to think about getting a valuation. This will need to be undertaken by an expert in the relevant country, and if possible, that expert should be agreed upon by both you and your spouse so as to avoid any costly disagreements.
Secondly there’s the fact that there are unique property laws in every country. In many cases, you’ll need to liaise with solicitors in the country of the property’s location in order to get matters resolved. Understanding the mechanics for a sale of transfer is essential so that protections can be built into your financial agreement to make sure you get your entitlement and your ex does what is needed.
Tax is another consideration which can be a costly mistake if overlooked. Similar to the UK, many foreign countries have a tax that applies when you sell your property abroad, so you’ll need to factor this into any negotiations and agreements.
What if you think your spouse is hiding assets abroad?
If you’re concerned that your spouse is hiding assets, whether in Engalnd or abroad, it’s essential that you seek independent legal advice. It may be that enquiries need to be raised, or that a specialist expert is needed if this is deemed appropriate.
The consequences for anyone who attempts to hide assets during a divorce in order to avoid a fair settlement can be very serious, including a reduction to their share in a financial settlement and even a jail sentence.
When it comes to divorce, having expert legal advice is beneficial no matter the circumstances. Whether you’re trying to resolve matters as amicably as possible, or your situation is just too complex to deal with on your own, having someone in your corner can really help to keep things on the right track.
Harrogate Family Law is here to help. If you’re dealing with this or any other family law issues, don’t hesitate to get in touch.