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International divorce financial settlement

The divorce settlement is a process of dividing the assets and liabilities that are in the marriage . The same applies to an international divorce; foreign assets and liabilities will be considered just like any other asset.

One of the challenges of dividing these assets is to find out the true worth or value of the asset. For a bank account statement, you can obtain this by obtaining statements for the past year. Another way to get a valuation is using valuation from a qualified expert in that country for land, houses, other properties and businesses. This will save conflicts between experts from other countries who may have different opinion on what these assets are worth.

Always, make sure to agree with your spouse on who will be the independent expert or notary in order to avoid conflict regarding the value of these assets.

It is legally possible to come to such an agreement with your partner without the assistance of divorce law solicitors. However, this is particularly unwise in the event of international and high net worth divorces, which are particularly complex. It may be wise to contact top divorce lawyers like Stowe, as we have particular experience in cases such as yours.

International Child Custody Agreements (Habitual Residence)

  • International child custody agreements (habitual residence) - need to know

    More complex still than considering finances is considering custody arrangements for children of international families/international divorces. Arrangements must be made regarding who the child will live with, how much time the other parent will have with the child, and where contact can take place. These arrangements were historically called custody and access orders and are still known by the same term in other countries; in England, they are now known as Child Arrangement Orders.

    Once in place, a child arrangement order may detail where the children will live and when. There are applicable international laws that allow these arrangements made abroad to be recognised by English courts. Because this is a difficult issue both personally and legally, it is recommended that you talk to a specialist child custody lawyer as soon as possible if this may apply to you.

  • What is habitual residence?

    Habitual residence is a legal concept which is based on the facts of each case. The case law on the term states that for residence to be ‘habitual residence’ the child must be integrated to some degree in the social and family environment of that country. It does not follow that a child should have the same habitual residence as his or her parents. It also does not follow that, just because a child is not physically present in the country in question there is no habitual residence there.

    Say for example that your child is not physically present in England and Wales. The Court could still be able to hear cases regarding the arrangements for the child where, for example:

    • The child has not established a new habitual residence in another country (i.e., the child is not physically present in England but retains habitual residence in England)
    • The child holds British nationality and habitual residence cannot be established
    • The child has been removed from one part of the United Kingdom to another less than 12 months ago without consent of the other parent with parental responsibility or an Order of the Court (section 41 Family Law Act 1986)
    • Where the order required arises in or in connection with matrimonial/civil partnership proceedings

    That last example is one which was considered in the case of Lachaux v Lachaux. It deals with two very important legal principles: recognition of foreign divorces and the jurisdiction of the Court in England and Wales to determine arrangements for children residing abroad. This is a case which has had extensive implications for divorce law solicitors managing international divorces.

Divorce and tax planning for international couples

Similarly, tax and pensions considerations are complex enough in normal divorces, let alone international ones.

  • Capital gains tax international divorce

    Transfers of assets between spouses or civil partners do not usually give rise to a Capital Gains Tax (CGT) charge. However, this rule only applies to spouses or civil partners that are living together at some point during the tax year.

    In relation to the family home, if that property has been the couple’s main residence throughout ownership, any gains arising from its sale are exempt from CGT. However, where one spouse moves out of the matrimonial home and buys or rents a new property then relief will usually only be available on their share of the gain for 9 months from when they moved out. This can be extended in some circumstances.

Inheritance tax international divorce

Transfers between spouses are exempt from Inheritance Tax (IHT), and this continues throughout the period of separation up until the decree absolute. Where one spouse is not resident in the UK, the maximum that can be transferred free of inheritance tax is £325,000.

Pensions international divorce

In relation to pensions, if you’re an international couple, the situation can become more complicated as for example, the US authorities treat post-tax split of pensions differently to the UK. In the UK, courts deal with pension arrangements via pension sharing, pension offsetting or a pension attachment order.

Contact Stowe, international divorce solicitors

At Stowe, our best divorce solicitors have decades of experience between them working on international divorce cases. Don’t entrust your unique case with local family law solicitors with no international expertise; talk to the best family law solicitors with nearly forty around the country including in London, Leeds, Newcastle, Cardiff, Manchester and Birmingham.

We carefully tailor our advice to every client, which is an absolute necessity in international divorces; every case with tax and pension concerns is different to the last. Call us at 0330 056 3171, or, request a free call back on a date and at a time of your choice.

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