Family Solicitors

The consequences of a relationship ending can be both daunting and complicated especially where financial matters are concerned. Solicitors are able to guide clients through the ‘minefield’ of the financial issues that need to be considered and can advise clients on how to protect wealth and/or prevent any attempts by the other party to hide income or assets. The ‘Cheats Charter’ is a mechanism in which one party hides assets from the other by tying them up in complex business structures. This has been used over the years as an effective loophole in affording the other party a fair division of the matrimonial assets.

In the recent case of Prest v Petrodel Resources Limited which has received a great deal of media coverage, the Supreme Court awarded the wife a share of the business assets that were in the name of the company controlled by the husband. The Court ordered the husband to hand over a multi-million pound property portfolio to his ex-wife, even though these properties were owned by an offshore company. The husband and wife in this case were an international couple in their 50s with four children who had made their main home in London. The Court found that the husband had breached court orders, failed properly to disclose the extent of his assets, and gave untruthful evidence at the final hearing. This Supreme Court decision was particularly significant as it clearly shows that the court will look at the reality of a particular situation and the actual business and company structures when considering financial matters upon a relationship breakdown. In this case the fact that the asset was in the name of the company, did not necessarily mean that it was owned by the company. In considering the particular actions of the husband the Court saw through the husband’s complex business structure position and held that the husband had actually used the Company’s resources as his own. Consequently, such resources were to be considered when considering the fair division of the matrimonial assets.

Divorcing couples are legally required to make a full and frank disclose of all their assets, income, property and pension – both in UK and abroad. Both parties will be required to complete a document known as "Form E" – which asks questions about all aspects of their finances and requires them to provide documentation such as tax returns, a year's bank statement and various financial documents. Although this particular case concerned substantial assets, the decision will clearly have far-reaching implications for many clients and the ramifications of this Supreme Court ruling will have an impact on divorcing couples of far more modest means. Where business and company assets are concerned parties should obtain legal advice at the earliest opportunity when a relationship breaks down so as to ensure that they achieve a fair settlement as effectively as possible. Duncan Lewis is recognised as a Leading Law Firm in Family & Child Care Law by Legal 500. Duncan Lewis has legal experts in Family & Child Care Law available across London and throughout the UK that are available to advise & assist their clients through the difficult legal elements that arise from a relationship breakdown.

Author is Savita Sharma, Solicitor & Director at Legal 500/Chamber UK Leading Firm, Duncan Lewis.