Overseas business and divorce

What should couples be aware of if they have overseas business or international assets when going through a divorce?

The breakdown of a marriage can often provoke mistrust and scrutiny between a couple around their financial dealings. This can be a particularly pronounced where there are either business assets or assets held overseas.

Many of our clients, or their spouses, have overseas business interests. Where that is the case, there can be a heightened risk of mistrust and scrutiny leading to protectionist measures being taken. This can cause a case to very quickly descend into a very expensive game of cat and mouse.

If you own an overseas business or are the spouse of an overseas business owner, the following guidance may help maintain a sensible approach to your case.

If you are the overseas business owner going through a divorce

The most basic and very best advice to give a business owner is to provide not only transparency, but also coherent and comprehensible information.

Assume that your spouse will look to run the information you provide past an accountant to get their views on the information produced. With this is mind, consider whether employing a UK based accountant to assemble and assimilate the information to a more understandable format before it is disclosed. Consider translating that disclosure.

Investment at this initial stage of the process can save you invaluable time and cost of third party disclosure orders later in the proceedings. If, having provided that disclosure, reasonable questions arise, do your utmost to source answers to those questions utilising the professionals on your team, both in this and in other jurisdictions where necessary.

Again, clarity is the key. A good rule of thumb is that if your own solicitor cannot understand what is produced then how would you expect your spouse and their team to, let alone a judge.

If you are the spouse of the business owner

The advice provided to the spouse of the business owner can be quite different depending on the circumstances. I have acted in cases where it is quite clear at the outset that steps are being taken to put assets outside the reach of the English Court. In those circumstances, action has to be taken quickly and urgently in order to preserve those assets.

If there is only a suspicion that the business owner may, at a later date, look to put assets outside the reach of the court, then it pays to exercise caution and consider whether there is a more measured way of addressing those concerns that does not carry with it the risk of damaging the business(es) in question. Freezing business assets can impact the ability of a business to operate as it needs to. If it is prevented from operating, that can have long lasting effects, which might ultimately deplete its eventual value and be counter-productive when you are seeking a share of its value as part of your settlement.

If, on request, your spouse is volunteering complete and coherent information and taking those steps outlined above then it would be most sensible to involve an accountant to consider the information being provided. You can then enter into a dialogue with them and the rest of your team on how best to approach the business assets in the context of your case.

Of course, there can be a great many exceptional situations requiring the above approaches being adapted (or disregarded) to a greater or lesser extent. It is important that a one-size-fits-all approach is not taken, regardless of which spouse you are acting for.

For some, navigating such cases in a way that maintains the equilibrium can be like walking a tightrope in a hall of mirrors. Advice and representation should be sought from a solicitor, who is experienced in dealing with such issues in a calm and rational manner.

For more information on how to approach business assets in a divorce, please see our previous articles: