Foreign Pension, holiday home? Nothing is excluded on divorce

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Foreign Pension, holiday home? Nothing is excluded on divorce.

If you are getting divorced in England and Wales, you may be tempted to think that foreign assets – i.e. those held outside the jurisdiction – are excluded from consideration when it comes to sorting out finances. This is untrue.

On divorce, spouses and civil partners alike, have a duty to disclose all assets in which they hold a legal and beneficial interest – both in the UK and abroad. Everything then gets thrown (metaphorically speaking) into the matrimonial pot, ready for distribution.

Foreign Pensions

Take foreign pensions, which have been very topical of late. Up until January 2017 it was an established practice that the courts of England and Wales are able to make a pension sharing order against foreign pensions as part of its legislative powers on divorce. A pension sharing order is where an existing pension is split and divided between the spouses in defined shares. However, following a recent ruling this all changed. It would now seem that the courts’ powers to make pension sharing orders only work in context to domestic pensions, not foreign pensions.

This does not mean that international pensions will be simply ignored; they just need to be dealt with in a slightly different way. The spouse with the foreign pension can provide a legal promise to obtain a similar order in the country in which they hold their pension, to split it with their spouse. Alternatively, the spouse with the foreign pension could be ordered to pay all or part of the income they receive from their foreign pension to the other spouse as maintenance.

If a spouse, say a husband, has both domestic and foreign pensions it may be that a pension share can be made against the domestic pension and/or any interest that the wife has in the foreign pension be offset against the husband?s interest in other assets held in England and Wales, most commonly property. This enables the husband to keep his foreign pension and gives the wife a greater share of the other domestic assets, such as the former family home.

Foreign Property

In contrast to the current position relating to international pensions, the courts of England and Wales are able to make orders relating to the sale or transfer of foreign property. This is because these types of orders are said to be made against the individual (in personam) rather than against a thing (in rem).

In practice the court will only make an order unless there is evidence to suggest that a foreign court would disregard it.

If a financial order is not complied with it can be enforced. International enforcement is an extremely complex area of law, which is not covered in this blog.

Protecting Foreign Assets

If one spouse, again say a husband, owns assets in their sole name or in the name of a third party outside the jurisdiction and the wife can show that there is a) a real risk that the husband may transfer or dispose of these assets in order to frustrate any claims that she may have against them and b) that there are not sufficient assets in the United Kingdom in order to adequately compensate her for any loss she may otherwise suffer as a result of such assets being disposed of, the wife could apply to the court for a worldwide freezing order. This is a form of interim injunction restraining a party from transferring, disposing, or dealing with the foreign asset.

If a foreign asset has already been disposed of in order to defeat the other spouse’s financial claims and/or to prevent enforcement, an application can be made to the court to set aside the previous dealings.

The lessons on divorce when it comes to foreign assets

So, what does all this mean in practice? Disclose everything and consider the nature of any foreign assets and how they can be dealt with. If there is a real risk that foreign assets are going to be disposed of, consider making an application for a worldwide freezing order. If an international asset has already been disposed of consider making an application to have the disposal set aside. Whatever the circumstances, divorce or separation that involves foreign assets can be more complex than usual. Taking specialist legal advice early means the best possible chance of ensuring assets are dealt with fairly and as smoothly as possible.

10 responses on “Foreign Pension, holiday home? Nothing is excluded on divorce

  1. Please help, I married my husband august 2015, after moving to dubai with him and his job, he lost his job and was relocated to Switzerland, I had set up a personal training business with clients at this point, yet it was his promise that he would support us both financially upon the move, after 10 months he’s paid rent car and food etc and a few flights for his step children (my children) as promised. After a violent marriage I have chosen to finally leave , as I have only a few clients and have earns in 11 months the equivalent of one of his months salary. So my question is am I entitled to anything upon leaving as I gave up everything to move with him

    1. Thank you for your comment Alison. From the information you have provided I am unable to determine whether the courts of England and Wales have jurisdiction to deal with your divorce (assuming that is your intention) and any financial claims. If you are habitually resident in Switzerland then you would only be able to bring proceedings in England and Wales if you and/or your husband are domiciled here, however please note that if jurisdiction is established on the basis of a sole domicile there are restrictions on what financial relief would be available. Assuming you and your husband are both domiciled in England and Wales, in determining what financial relief would be available to you the court would take into consideration any impact the decisions you have made during the marriage (e.g. the move from Dubai to Switzerland to support your husband in his new job) has had on your earning capacity, particularly when considering whether to order spousal maintenance. I suggest you obtain further legal advice from a specialist family law solicitor practicing in Switzerland (if this is where you currently live) and a specialist family solicitor practising in England (if applicable).

  2. I have been with my husband for 10 yrs and we have a holiday home in Portugal however the deeds are in his name only. He now wants a divorce and has told me that due to the laws in Portugal I am unable to claim any part of this asset. Is this true?

    1. If divorce proceedings are initiated in the UK then property owned abroad will also form part of the matrimonial assets, which are potentially available for division. This is regardless of whether or not the property held abroad is in joint names or the sole name of one party. Whether or not divorce proceedings can be issued here in the UK depends on where you / your husband are living / domiciled. We cannot give specific advice regarding your case. If you would like to speak to one of our specialists then please contact us.

  3. My husband (Dutch) and I (English) both lived in the Netherlands, we bought a second home in the UK of which is registered in the UK land registry, with an absolute right and a share of 50:50 as tenants in common. Upon divorce, can a dutch court award him the house without any payment, with respect to the house, given to me? or would it have to be a UK court that decided on what happened with the house?

    1. Thank you for your comment. In order to ascertain whether a Dutch court can make orders relating to foreign property you need to consult a Dutch family lawyer as this would be dealt with under domestic Dutch law. If divorce proceedings were started in England or Wales, then the courts here would have the ability to make orders relating to property abroad

  4. Hi, My Girlfriend owns property (Fam land) in Thailand and under Thai Law it would be classed as ‘Sin Suan Tua’ (Basically Non-Matrimonial’ property).

    In a UK divorce court, can the judge overrule the law that applies to this property from the country where it is situated, and potentially consider it as Matrimonial Property?

    1. Thank you for your comment Gary. In England and Wales, on divorce, the court will apply the law of this country when dealing with any dispute around finances; overseas property would not be excluded simply because it conflicts with the domestic law of the country in which the property is located. To be clear, the matrimonial laws apply to married couples only; similar provisions are in place for those couples that have entered into a legal civil partnership. The law does not apply to separating cohabiting couples.

  5. My wife and I both have several pensions. In terms of pension pots, we both have the standard UK state pensions. In addition I have a UK private work place pension pot and she is eligable for an Australian state pension but has no private pension. My question is i) can the Australian state pension be included in the division of assets and ii) how would it be treated in terms of offsetting or even be valued vs my pension pot. At the moment in terms of future revenue streams they are roughly equal.

    1. Thank you for your comment Joseph. Your wife’s Australian superannuation will be taken into consideration as part of the overall capital assets; she will need to provide a valuation from the Australian Government. It will not be possible for you to share your wife’s Australian superannuation. If, as you state, your respective pension pots are roughly achieving equality of income on retirement, then offsetting may not be necessary. If you are in any doubt, I suggest you contact a pension actuary who will be able to assist you further.

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