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International Child Custody Agreements (Habitual Residence)

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 lanning 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 404 2031, or, request a free call back on a date and at a time of your choice.

International divorce and jurisdiction Q&A’s

If your marriage has an international element to it, the issue of jurisdiction may come up should you seek divorce. At Stowe Family Law, we represent clients in proceedings in courts throughout England and Wales. We do not represent clients in the courts of Scotland or Northern Ireland.

  • What is jurisdiction?

    Put simply, jurisdiction is the country in which court proceedings relating to your divorce, financial matters and children issues will be dealt with.

     

  • Where will my divorce be heard?

    That depends. If you are living within the European Union, when it comes to divorce, you have to consider the ‘race for jurisdiction’. In such cases, your divorce will be heard in whichever country within the EU the papers are filed in first, provided you have an appropriate connection with that country.

    The courts in that country will then have jurisdiction over your case and any decisions about financial settlements will be made using that nation’s laws.

    If you live outside the EU, then different rules apply as to whether that country should have jurisdiction or the courts in England and Wales. It may not be a case of who was first to issue but instead which country is the most appropriate and relevant place for the divorce to be dealt with. These issues are complex and it is very important that you seek advice as early as possible.

  • How is jurisdiction determined?

    You cannot simply do some research and pick a country where you think the divorce laws will be kindest to you and start proceedings there.

    You must demonstrate a connection to the nation you submit your application in. This can be done in a number of ways. For example, if both you and your spouse are habitually resident in the country in question or if you are a national of a country or it is your country of domicile.

  • What is habitual residence?

    Habitual residence is a complicated concept. In simple terms, it is related to the country where a person lives, but to be “habitually resident” in a country has different implications depending on the type of legal case you are involved in. In many cases, the term is based on someone’s “centre of interests”, or whichever jurisdiction a person is most closely associated with.

  • So where is the best place to divorce?

    This is another complex issue. No two countries have exactly the same divorce laws so deciding which one to file in is no easy task. You must consider what assets you have and how differently they could be divided depending on where the case his heard.

    To determine this, you will need to seek out legal advice from professionals who specialise in international family law. They will be able to give you an idea of the pros and cons of issuing proceedings in England and so that this can be compared to the position in other jurisdictions. This advice is vital. If you make a decision about which country to go ahead in without accurate information, you may find it difficult to get a fair settlement when the process is completed. Selecting a jurisdiction which is favourable to you is sometimes called forum shopping.

  • What about my finances?

    In England and Wales, the divorce process is separate from the financial settlement. This means that you can be divorced without having achieved a financial settlement. Also, the court will not make any orders in relation to your financial arrangements unless it is asked to do so either by court proceedings being commenced or by you filing with the court an agreed settlement in the form of a consent order.

    The divorce process can be different in other jurisdictions and it may not be possible to conclude your divorce without the financial matters being resolved at the same time.

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