Father ordered to return his son to the UK after losing case

A UK court has ordered a father who kept his son in Singapore with his parents to return him to the UK.

The couple met and married in Singapore in 2011. The mother originated from Mongolia. The father who worked for a bank, purchased a home in London and the mother joined him there. Their son was born the following year. By all accounts the marriage was strained. Police were called on a number of occasions and Westminster social services were involved when allegations of domestic abuse were made against the father.

In June 2013 the mother was studying at Birkbeck University and it was agreed the father’s parents would take the boy to Singapore to live with them for a few months.

In January this year, the couple flew out to Singapore with a return flight apparently booked for all three of them a few weeks later. Without telling the mother, the father had resigned from his London-based job, lined up a new position in Singapore and withdrawn £18,000 from the joint account. Immediately on his arrival in Singapore, the father commenced custody and divorce proceedings. The mother was served with the papers over lunch with the father.

The mother returned to the UK without her son. She found herself locked out of the family home and her ATM card cancelled. She started court proceedings in England for the return of her son, claiming she had only ever agreed to a temporary stay. The father, meanwhile, insisted that they had agreed to an indefinite stay.

The presiding judge looked at the issue of jurisdiction and the child’s “habitual residence”: was it in England, where he had been born, or had he become Singaporean during his stay in the country, as the father argued?

The judge said that the factual element is important i.e. where the child is physically located but also important is the intent and purpose of the parties and the wider circumstances of how the child came to be where he currently is.

The judge concluded there was no shared intention to relocate back to Singapore. The purpose of the child’s journey to Singapore, as agreed by his parents at the time was for a short period from August to November 2013, while the mother completed her studies. This was extended to January 2014 because the father could not travel owing to work commitments. The child’s habitual residence therefore remained in England and the judge ordered that the child be returned.

We’re “consciously uncoupling”, what happens next?

The idea of “conscious uncoupling” has attracted a great deal of attention in the last week following the announcement of Gwyneth Paltrow’s divorce from Chris Martin. In short, they have decided to separate amicably.

The couple have two young children together and have spent married life living in the UK and the USA. Their joint net worth is reportedly $148,000,000 and they have a portfolio of properties in the UK and USA. So what happens next?

Where can they divorce?

Couples who live or had lived in a number of countries may have the option of deciding where they start court proceedings; this does not necessarily have to be the country in which they live or where they married. In Chris Martin and Gwyneth Paltrow’s case, it may be possible for them to divorce in England as they previously lived in London.

The country where couples start court proceedings could have a significant impact on the outcome when it comes to children and assets. For example, the courts in some countries will award bigger divorce settlements to wives than others and will consider a homemaker as equal to a breadwinner; others will not. The enormous differences between countries can sometimes result in divorcing couples ‘forum shopping’; shopping around to see which courts will give them a better deal. There can sometimes be a race between couples to get divorce proceedings started in the country that will get them a better divorce settlement.

What happens if there are properties or assets abroad?

Where there are assets abroad, it is always important to make sure that advice is sought from a qualified advisor from the country in which the assets are located. There may be problems with enforcing divorce settlements obtained in one country, in another.

What about the children?

It would seem that Chris Martin and Gwyneth Paltrow are intending to “co-parent”, which suggests that they will both play a meaningful role in their children’s lives and are intending to be amicable. But what happens if they can’t agree on where the children will live and who they will live with?

In England, if one parent wishes to move abroad with a child, they need the permission of the other parent, failing which, they must apply for court permission. Parents, who have a court order in respect of either residence or contact for their children, may need to get it registered with the court in the country that the child lives so that it can be enforced. In very extreme cases, one parent may remove a child from the country in which they live without the permission of the other parent; this is otherwise known as parental child abduction. It is unlikely to occur in the present case, but is sadly on the rise given the increase in families living international lifestyles.

As it can be beneficial to use the English legal system to process your divorce you should always take advice on whether you are eligible to divorce under English law. Please contact us on 01225 750000.

Hong Kong-based ‘house husband’ wins right to hear case in England

Divorce is never easy, especially when children are involved, and this issue can get even more complicated for expatriate and international couples. Divorce and family law varies from country to country, and can be very complex indeed when dealing with relationships that span national borders.

The first question that needs to be considered is which country’s court will have jurisdiction. England will have jurisdiction if one party is resident here for at least 12 months before starting divorce proceedings. A recent ruling by the Court of Appeal in England demonstrates the significance of jurisdiction.

The case concerned a 15 year marriage between a high-earning investment banker and her stay-at-home husband. They lived an international lifestyle with homes in Hong Kong, Malaysia and London. Their assets include a £1m wine collection and £4.5m unmortgaged apartment in Kensington

The wife wanted a divorce in Malaysia. Among other things, she claimed that the couples’ interests were centred there and that as she is the main breadwinner court proceedings should be located near to her current place of work – Malaysia.

The husband on the contrary claimed that the marriage had been broken down for at least two years and in that time he spent more and more time in England. The husband’s centre of interests ceased to be dictated by the wife’s working life.

As well as the above considerations, it is undoubtedly the case both parties had in mind the financial consequences of divorce in both countries and in particular the fact that English law is perceived to be more favourable to the financially weaker party. The stakes were high.

In the event, the Court of Appeal ruled in the husband’s favour. The Judge decided that England had been the husband’s “permanent and stable home” for at least 12 months before issuing the divorce Petition and as such he was entitled to start proceedings in England.

As it can be beneficial to use the English legal system to process your divorce you should always take advice on whether you are eligible to divorce under English law. Please contact us on 01225 750000.

Warning across waters

Breaking up may be hard to do, but for married expats it can be fraught with danger. Often there is a choice of where to divorce and where couples choose to divorce can have a major impact on both parties’ financial health, so getting it right is crucial.

The Eurostar divorce

England and Wales is perhaps most favourable to the financially weaker spouse. In expat circles this is often the wife for example if she moved abroad when her husband’s work took them there. It is favourable because in England and Wales maintenance is open-ended, meaning it must continue to be paid until the payor dies or their financial circumstances change. In Scotland, in most cases there is a three-year maximum term for maintenance and in most other EU states you have to show the court why you need the ongoing money. Clearly if this is the case the financially stronger party should use a foreign lawyer and the financially weaker party should get on the first plane back to England. The way the system works is that the place where you petition for divorce first gets jurisdiction over the case.

Prenup, we want prenup!

Financially weaker spouses should remember that prenuptial agreements, which are designed to protect pre-martial wealth, are not legally binding in England and Wales. Though they are not binding, a judge may take it on board when making a decision. In a very short marriage, the judge may well allow the prenup to stand, but in a longer marriage where the passage of time means the contents of the prenup are out of date, the chances are the judge will discount it.

Devil’s in the detail

In family cases, disclosure is crucial. English law requires a full and frank disclosure of a person’s financial position. If they lie, they could be convicted of contempt. In the well-publicised case of Young v Young the court’s patience finally snapped and the husband was sentenced to six months’ imprisonment for non-disclosure. In contrast, in Italy individuals give disclosure merely “on their honour”. Assets are much harder to trace without the full force of court orders to oblige disclosure.

Enforcement

English law takes a firm stance on enforcement which is backed up by international agreements with other countries. This allows English-made orders to be enforced abroad. Such countries include Australia, Canada, the USA and the member states of the EU.

Experienced divorce lawyers are all familiar with cross-border cases, and the complexities which make these divorces so difficult. No-one facing the devastating loss of a much-loved and trusting spouse wants to pull-the-plug on the marriage until the end is beyond doubt but by then, when realisation finally and cruelly dawns, it could be much too late. Consult an experienced lawyer, you can always withdraw the divorce petition if you wish.

Expat Divorce

Because the Mogers family team have collectively lived in countries such as Hong Kong, The Philippines and Nigeria we know it is hard enough to know where to turn to for a decent plumber, let alone specialist advice on matrimonial and family problems.

For those separating on British shores help is at hand in the form of Resolution – an organisation specifically set up by English family lawyers to help point separating couples in the right direction. However, in the event of a marriage or relationship breakdown between expatriates abroad, it is more difficult to know where to turn to. They will find themselves going through great anxiety facing questions such as “will I be able to stay here”, “who will sponsor the children and provide visas” and “what am I entitled to”. This is in addition to the normal emotions during a separation i.e. guilt, anger, sorrow and vulnerability. The sooner these issues are resolved, the better.

We often deal with enquiries that follow the pattern mentioned above. On a first meeting with a client we give an early consideration to the issue of jurisdiction. What is the appropriate forum for proceedings to be commenced? Jurisdictions to consider would be that of the client’s home country, the partner’s home country, or the jurisdiction of the host country if this is different.

Jurisdiction will largely depend on nationality, domicile and habitual residence of both parties. British expatriates are often unaware that divorce and financial matters can be dealt with swiftly through the English courts, without them even leaving the host country. A divorce is routinely carried out on paper, without attendance. It is not, as often thought, necessary to divorce in the place in which you were married.

Jurisdiction is a complex issue, and requires detailed consideration. Lengthy delays to any proceedings, amicable or otherwise, can take place if matters are commenced in the wrong jurisdiction. It is also important to be aware from the outset of the enforceability of any orders that are obtained. Some orders made by the English Courts may not be enforceable in the host country if they conflict with local laws. If separating couples seek comprehensive advice on all these aspects at an early stage, they can increase the likelihood of an amicable and swift resolution of the issues between them.

As in life, the key to a good marriage is compromise. The same can be applied to separation and divorce. Both parties must compromise with each other and to avoid the entire family becoming embroiled in a lengthy, costly and upsetting period; each party must try and continue to consider the feelings, needs and the rights of the other party.

Clean break via a pre-nuptial agreement

The Financial Times recently reported that professionals in the City and those working abroad are increasingly turning to pre-nuptial agreements in order to protect the savings and investments generated from their labour. These “new money nuptials” are a contradistinction to the “old money nuptials” which typically look to ring-fence assets inherited on the death of parents, grandparents etc.

So are pre-nuptial agreements binding and are they worth the “hassle”? To help breakdown the issues, let’s work with the following common example.

Jeremy is a British citizen who is getting married to Jenny, an Australian national who was schooled in England. They both currently live and work in Qatar taking advantage of the more favourable tax system. Jeremy is a civil engineer and Jenny an English language teacher. They plan to continue living in Qatar after marriage but do intend to return to England to set up a family. There is a significant imbalance in assets. Jeremy has roughly £1,500,000 in assets, including equity in a house in Cheltenham and investments. Jenny has a few thousand pounds in savings. Neither party is likely to inherit any significant sums.

The current position on pre-nuptials in English law is that weight would be given to them in the event of a disagreement provided certain factors are met. Importantly, the agreement must be fair in the prevailing circumstances and accompanied by some important formalities i.e. independent legal advice, absence any duress (pressure) and typically they are signed at least 21 days before the wedding.

Many pre-nuptials seek to ring-fence assets accrued before the marriage, so in Jeremy’s case the properties and investments, with the agreement essentially providing that the couple will, the event of a divorce, share the wealth they have built together – what might be called the “fruits of the marriage”. However, it is highly recommended that the pre-nuptial is periodically reviewed – it is important that neither party will be left without financial provision, and any children will need to be properly provided for. Staying with the above example, if Jeremy and Jenny have daughter, Jessica, the pre-nuptial would need to altered on Jess’ birth to take her into account and make sure she is provided for. So while there may be a clean break between Jeremy and Jenny on divorce, it is not possible for a parent to get a clean break from a child and issues such as child maintenance will need to be considered.

In terms of their benefits, pre-nuptials offer the likes of Jeremy and Jenny the certainty of knowing what will happen in the event of a divorce. The fact they currently live in Qatar is not necessarily a “deal-breaker” – a clause can be entered into the agreement which provides that both parties agree at the outset that any later dispute will be dealt with by English courts applying English law. More than this though, given the cost of a prenuptial is significantly less than court proceedings post divorce it really does pay to discuss and draft a prenuptial.

Traditionally many people like to sit down with their solicitors and discuss matters, nowadays with Skype it is often possible to discuss matters via the web. Papers can be faxed and sent via email.

Please contact Rebecca Silcock if you have any questions relating to pre-nuptials.

Young globe-trotters set to be winners with inheritance tax changes

Globalisation is leading more young professionals into international work and they look set to be the winners in changes in inheritance tax rules in the UK, designed to reflect the lifestyle changes of the rising tide of overseas workers who are increasingly likely to marry someone from a different country.

The 2013 Budget introduced two important changes to the inheritance tax (IHT) rules that will benefit couples where one partner is domiciled abroad.

From 6th April the IHT exemption on gifts to a non-domiciled spouse has been raised from £55,000 to £325,000 and non-domiciled spouses have been given the option to elect to be UK domiciled for IHT tax purposes.
Domicile is a concept that has no precise legal or statutory definition. It has nothing to do with residence, so a person stationed abroad for work will still be domiciled in the UK.

And it has little to do with nationality, as an Englishman who has settled in the States might have acquired US domicile for example. It is more to do with a sense of homeland or mother-country. At birth everyone has a domicile of origin, for example the domicile of one’s father in the case of a child living with the father, and one can acquire a new domicile – called a domicile of choice – by moving to another country with the intention of settling there permanently.

However, there is also what is known as deemed domicile for IHT purposes. If you have been resident in the UK for 17 of the last 20 years before a gift or death that gives rise to an IHT event, you will be deemed to be UK domiciled for IHT.
But non-domiciled individuals have generally been treated differently for IHT; they only have to pay IHT on assets that are situated in the UK, whereas UK domiciled taxpayers must pay IHT on all that they own, even foreign assets.

Obviously it would be easy for a UK taxpayer to avoid IHT by transferring assets to a non-domiciled spouse who would then move them abroad. And that is why the exemption for gifts between spouses has always been limited where the gift is to a non-domiciled spouse. From the mid 1980s the limit stood at £55,000 (the nil rate band at the time), so the increase to the current nil rate band of £325,000 is being hailed as long overdue.

The other reform is that a non-domiciled spouse can now elect to be treated as having UK domicile for IHT purposes and, by doing so, qualify for an unlimited spouse exemption. Once made, the election cannot be revoked while the individual is living in the UK. But if the individual leaves the UK and lives abroad for more than four years, the election will no longer be effective.

Nicola Owen private client expert of Bath-based solicitors Mogers said: “This is an issue that is becoming more and more common with globalisation. It will be important to weigh up the advantages of an unlimited spouse exemption against the disadvantage of having all one’s worldwide assets made subject to IHT.

“It is likely to be advantageous to young international professionals who are quickly accumulating wealth in the UK but who do not as yet have wealth abroad. Although it’s likely to be a different calculation for taxpayers in middle age or later who have either had time to accumulate wealth abroad or who have inherited from their parents.”



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