Leaving the EU: What does this mean for family law

Leaving the EU What does this mean for family law

Leaving the EU: What does this mean for family law? Many international families are concerned they’ll lose access to justice.

Are you a cross border, UK/EU family? This blog is for you. But please remember to consult a lawyer who is an expert in international family law if you have any doubts.

When did the UK leave the EU

Friday 31st January 2020, at 11pm.

What about my child support, my divorce proceedings

Are you concerned:

  • your maintenance or child support will stop, or
  • divorce proceedings will go off the rails, or
  • children will be at a greater risk of abduction?

The answer is that all EU rules are staying firmly in place during the implementation period. So there’s really nothing to worry about – at least until the end of 2020.

How long is the implementation period

1st February 2020 to 31st December 2020. The Government will negotiate our future relationship – including whether useful EU family law rules will continue – during this period.

What are the useful EU family law rules

They cover:

  • ‘first past the post’ rule for starting divorces
  • recognition and enforcement of maintenance orders, and the recognition of divorces
  • enforcement of contact and residence orders, and orders for the return of children

‘First past the post’ rule for starting divorces

Why is this important? Because otherwise there could be proceedings going on at the same time in two different countries. 

Is family law near the top of the agenda

The Government is already working on an important piece of legislation: the Private International Law (Implementation of Agreements) Bill. This means international families will have access to justice under certain vital Hague Conventions. The Government is also aiming for us to sign up to the Lugano Convention.

What’s the Private International Law (Implementation of Agreements) Bill

The aim of this bill is to ensure three vital Hague Conventions will still apply even after the end of the implementation period.

Which Hague Conventions are covered 

The Private International Law (Implementation of Agreements) Bill covers:

  • 1996 Hague Convention – protection of children in cross-border disputes.
  • 2005 Hague Convention – ensures:
    • there’s no confusion about where a case should be heard, and
    • any resulting decision is recognised and enforced in other countries.
  • 2007 Hague Convention – the international recovery of child support. And makes it harder for parents who live abroad to avoid their maintenance obligations.

See page 28 of The Queen’s Speech of December 2019.

See my comments about these Hague Conventions in Brexit, Divorce and Family Law – what if there’s no dealIn this blog I make the point that we will still need to incorporate EU regulations into our family law system – we can’t just rely on Hague Conventions.

What’s the Lugano Convention

The Ministry of Justice reports that there is support for the UK to join the Lugano Convention. Why is this important? The Ministry of Justice says:

‘The agreement protects the rights of 17,000 UK nationals living in the EEA EFTA states and 15,000 EEA EFTA nationals living in the UK, ensuring that at the end of the transition period they will be able to enjoy broadly the same rights as they do now.’

But the Lugano Convention is by no means perfect. See my explanation of the Lugano Convention in Brexit White Paper – what you need to know.

What are the EEA EFTA states

Iceland, Liechtenstein, Norway, Switzerland, and the EU.

Leaving the EU: What does this mean for family law

Contact Family Lawyer Joanne Houston on 01962 217640 for an initial consultation on Leaving the EU: What does this mean for family law? In this 20 minute session she will review your situation and how you can achieve your objectives.

JUST FAMILY LAW are specialist divorce and family lawyers. We offer Pay as you go costs. We offer Collaborative law solutions tailored to your family’s needs.

The topics covered in this blog post Leaving the EU: What does this mean for family law? are complex. They are provided for general guidance only. If any of the circumstances mentioned in this blog apply to you, seek expert legal advice.

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What does Brexit No Deal Mean for Family Law?


What does Brexit No Deal Mean for Family Law

What does Brexit No Deal Mean for Family Law?

How will a ‘No deal’ Brexit affect my family law case?

This blog is for you if you are a UK/EU family, and it also applies to anyone from anywhere in the world who has a pension here. If you are in Northern Ireland your situation might be slightly different to England and Wales and you should speak to your lawyer. Similarly Scotland.

If you are a family lawyer seeking information, download guidance from the Law Society, “Joint Resolution and Law Society note to family lawyers in England and Wales of practical recommendations in the circumstances of no deal on EU exit”.

What should I do?

Take advice from an expert international family lawyer immediately. Why? It might be important for your case to be started and finished before Brexit because it might be difficult afterwards. And it could be your Court order might not be recognised or enforceable afterwards.

Obviously there are many countries involved and there isn’t a one size fits all answer. Your lawyer may need to speak to a lawyer in another EU country.

Should I start my divorce before Brexit?

EU rules contain a “first past the post” rule for starting divorces. After Brexit, divorces will be on the basis of “closest connection”. So if it’s important for you to divorce here and “closest connection” might not work, you better start before Brexit. But recognition of your divorce in EU member states may differ depending on the state involved. So you might need to finish before Brexit too.

What about recognition of UK divorces in EU member states?

Divorces are likely to be recognised in some but not all remaining EU countries. If recognition of your divorce is important for you, take advice immediately. For example, do you intend to live or work or buy property in a member state? Are you going through a same sex divorce?

What’s the solution? Make sure the divorce is finalised before Brexit.

How do I get divorced before Brexit? 

The petition is issued in the Court and served on your ex, your ex acknowledges it, you fill in the statement in support, the decree nisi is pronounced by the Court. Six weeks and one day later you make an application for the decree absolute. This brings your marriage to an end.

In a hurry? Apply to the Court to abridge time for the whole process or to obtain the decree absolute earlier.

After the decree absolute comes the certificate …

You will need to complete the certificate before Brexit too, and you will need to file the certificate in the Court of the member state. Speak to an expert international family lawyer about certificates and how to apply for them.

What about maintenance?

If you want to be sure a maintenance order is recognised or enforced in another EU member state after Brexit, get it made by the Court beforehand. If there isn’t agreement between you, time is getting short to list the final hearing before Brexit, and time should also be allowed to register (‘exequatur’) the order before Brexit. How long will this take? Depends which member state is involved. Speak to an expert international family lawyer as soon as possible.

This applies not only to maintenance cases involving other EU member states but also within the UK; eg in English/Scottish divorces.

We don’t live in England or Wales, but one of us comes from there …

This is called “sole domicile”. Things might get better for you after Brexit if you have a needs based claim for maintenance. This applies to claims involving countries the world over, not just the EU. Talk to an expert international family lawyer about whether this applies to you, and the possibility of adjourning your case until afterwards.

The pension is in the UK but I’m not …

You want a pension sharing order of a pension in the UK but you don’t live here and you don’t come from here. Article 7 of the EU Maintenance Regulation looks after you by providing a “forum of necessity”. But this will go after Brexit. See your lawyer about an urgent application to be made before Brexit.

Children …

An EU provision called “Brussels II” allows contact orders and orders for the return of children to be enforced in the remaining EU countries. But a certificate has to be obtained when the order is made. This is a similar certificate to that required in the recognition of divorces, as above.

In other children cases, such as residence, the process is different. As in the case of finances, the order must be registered (the “exequatur” process).

If it’s important to get the order before Brexit, factor in how long it will take to get the certificate, or to complete the registration, too.

What does Brexit No Deal Mean for Family Law?

Contact Family Lawyer Joanne Houston on 01962 217640 for an initial free of charge consultation on the question What does Brexit No Deal Mean for Family Law? In this 20 minute session she will review your situation and how you can achieve your objectives.

JUST FAMILY LAW are specialist divorce and family lawyers. We offer Pay as you go costs. We offer Collaborative law solutions tailored to your family’s needs. 

The topics covered in this blog post What does Brexit No Deal Mean for Family Law? are complex. They are provided for general guidance only. If any of the circumstances mentioned in this blog apply to you, seek expert legal advice.

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Change in US Tax Rules for Alimony


Change in US Tax Rules for AlimonyA big change in US tax rules for alimony is coming up in December 2018.

Do you live in the UK and your ex in the US? Or do you live in the US and your ex in the UK?

This change might apply to you and you may need to take urgent action.

The Tax Cuts and Jobs Act 2017 applies after 31 December 2018. Currently, payment of alimony (as maintenance is known in the US) is tax deductible. And those who receive alimony (the lower earner, so generally the wife) pay tax on it.

The change will mean husbands (generally the higher earner) will get no tax advantage and wives will no longer pay tax.

Two Ways of Looking at Change in US Tax Rules for Alimony

International families are rushing to finalise their financial arrangements to preserve the tax position. But there are two ways of looking at it.

Some say it’s a bad thing. Husbands will lose the tax advantage and may want to pay less alimony. And as wives won’t have to pay tax why should husbands pay them so much anyway? If you look at it this way you can understand why some international couples are panicking.

The UK went through similar tax changes in 1989. Lawyers were initially nervous. Would husbands be less willing to pay? Would wives miss out?

But in the long run the change in UK tax law didn’t make too much difference. Maintenance is calculated in the UK on the basis of need. How much does the wife require to support herself and the children? And what is the shortfall between her requirement and her income? This figure generally indicates the sort of maintenance that is required. See my recent blog Maintenance and Clean Break on Divorce.

Since 1989 there hasn’t been the head scratching and the complicated calculations – if he pays this much, how much tax relief will he get? So shouldn’t he pay more and pass over some of the benefit? And what about the wife, will it push her into a tax paying bracket? How much tax exactly will she have to pay? None of this applies anymore. In the UK it’s now a simple case of “What You See Is What You Get“.

Change in US Tax Rules for Alimony – Long Term & Short Term

Short term, couples will want to take advantage of the existing tax system. But hopefully the impending change won’t tip wavering couples into divorce.

Long term, it’s possible the change won’t make a fundamental difference. And it might save on professional fees as it will be simpler to work out what is actually paid and received – because they will be one and the same.

Change in US Tax Rules for Alimony and International Tax Rules

If one of you is US or UK based, and the other in a country where tax remains relevant, such as Belgium, Ireland, Italy, Netherlands or Portugal, make sure you take advice from an expert international family lawyer.

Prenuptial Agreements

If you are in an international family and you have an existing prenuptial agreement you should seek advice on the impact of the change in US tax rules for alimony.

Don’t Delay!

Anyone wanting to take advantage of the existing system should make sure they take advice now. There may still be time to secure a maintenance or alimony order – whether by consent or in Court – prior to 31 December 2018. And please note that the detail of the changes coming up in the US tax rules are complex and far reaching, and go well beyond the scope of this article. So please don’t delay taking expert advice.

Contact  Joanne Houston on 01962 217640 for free advice on the forthcoming change in US tax rules for alimony. In this 20 minute session we will review your situation and how you can achieve your objectives.

JUST FAMILY LAW are specialist divorce and family law solicitors offering personalised legal solutions. We offer collaborative law which is especially relevant in providing solutions tailored to your family’s needs. This includes same sex couples and their families. Visit our website just-family-law.com The topics covered in this blog post are complex and are provided for general guidance only. Therefore if any of the circumstances mentioned in this blog have application to you, seek expert legal advice.

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Brexit White Paper and Family Law – What You Need To Know

Brexit White Paper and Family LawWhat is the Significance of the Brexit White Paper for Family Law?

See February 2019 update, What Does Brexit No Deal Mean For Family Law 

Few will have missed that the Brexit white paper published 12 July 2018. But what does it mean for family law?

The European Union (Withdrawal) Act became law on 26 June. This means that although the EU will no longer legislate for the UK, we retain all the helpful EU regulations which apply to family law. But there’s a problem.

On 29 March 2019 we leave the Court of Justice of the European Union (the ECJ) and we will no longer be bound by ECJ decisions. So even though we have all the EU rules for family law, these will gradually move out of sync as the ECJ will make law we do not recognise.

This could affect key areas such as the recognition and enforcement of family law judgments. See my earlier post Brexit, Family Law & Divorce – March 2018 Update

What Does Family Law Need From Brexit?

We need our rules to stay in line with the remaining EU countries in vital areas of family law. These rules relate to:

  • The country in which divorces, matrimonial financial cases, and children cases must start. Otherwise cases can be started in two different countries at the same time. At the moment, for example, cases about children start in the country where they live.
  • The recognition and enforcement of UK orders in remaining EU countries and vice versa.
  • The Hague Convention in relation to child abduction cases. EU rules impose the following rules:
    • A stricter timetable
    • The children’s home country must make the final decision
    • The Court will hear evidence from the child.

The Brexit White Paper And Family Law

The white paper proposes we sign up to the Lugano Convention. But because the Convention is old and out of date, the white paper also proposes we reach a deal with the EU to bring it up to date.

What Is The Lugano Convention?

The Lugano Convention originated in 1988 as an agreement between the EU and the European Free Trade Association (EFTA). Its current incarnation dates to 2007 and its signatories are:

  • The EU
  • Iceland
  • Switzerland
  • Norway
  • Denmark

All the members must agree to new states joining.

What Does The Lugano Convention Do?

It ensures members apply the same rules and pay regard to how each other’s Courts interpret these rules. But even the white paper acknowledges some of the Lugano Convention’s provisions have been “overtaken” and are “limited in scope”.

This is because under the Convention there is no guarantee case law on regulation will be aligned between the signatories. All it requires is for the signatories to “pay due account” to each other’s case law (including the EU’s ECJ). So we could still fall out of sync.

It’s possible of course for the EU to revise the Lugano Convention to make sure it does its best for international families but of course all the signatories will need to agree.

Brexit White Paper And Family Law – What Is Needed

Specific proposals for making the Lugano Convention fit for purpose are required. But with the Government dealing with trouble in the ranks, negotiations with Brussels, and balancing all of this with trying to make new trade deals, it’s anybody’s guess if and when this might happen.

What Is The Brexit Timetable?

The EU target date for agreeing Brexit terms is 30 September. It’s probably quite important the Government sticks to this timetable as it will need to start post-Brexit trade talks in the autumn prior to making new trade deals before we leave the EU on 29 March 2019. Unless of course there is an agreement between the UK and the EU to extend the period for negotiations.

Does The White Paper Recognise The Difficulties International Families Face?

Yes, to a certain extent.

“Cross-border families benefit from clear rules to resolve disputes in sensitive matters quickly and efficiently.”

(Paragraph 1.7.7 sub paragraph 145).

But Please Remember …

If you are keen to divorce in a particular country for financial reasons you should seek legal advice without delay

Brexit, Family Law And Divorce

Contact  Joanne Houston on 01962 217640 for free advice on Brexit, Family Law and Divorce. In this 20 minute session we will review your situation and how you can achieve your objectives.


JUST FAMILY LAW are specialist divorce and family law solicitors offering personalised legal solutions. We offer collaborative law which is especially relevant in providing solutions tailored to your family’s needs. This includes same sex couples and their families. Visit our website just-family-law.com The topics covered in this blog post are complex and are provided for general guidance only. Therefore if any of the circumstances mentioned in this blog have application to you, seek expert legal advice.

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What Are Your Child Maintenance Options?

When a relationship breaks down I’m often asked:

  • How do I get Child Maintenance?
  • How much will I get?
  • What if we can’t agree?
  • What if the paying parent won’t pay, or is abroad, or is very rich?
  • How about the school fees?
  • Does it make a difference if the parents aren’t married?

You’ll find answers to all these questions below.

It’s no cheap matter to bring up children and to provide them with all their needs. And it costs even more if you’re a lone parent. A recent report states:

“The basic cost of a child from birth to age 18, excluding housing, childcare and council tax, is £75,436 for a couple family, and £102,627 for a lone-parent family.”

The Cost of a Child in 2017 by CPAG

Feelings may be running high between you and the children’s other parent but if you can for a moment put your differences aside and reach an agreement, this will be good not only for the children but for your ability to work together for the children’s welfare in the future.

How Do I Get Maintenance For The Children?

The best approach is to reach an agreement between you. This is often referred to as a Family Based Agreement. But what do you need to agree?

There are many Child Maintenance options. Monthly payments, regular lump sums, or payments for clothes, toys, sporting activities, music lessons, school uniforms or even school fees. Another alternative is to share the care of the children.

Parents sometimes agree a combination of all the above.

What If We Can’t Agree? What If Payments Aren’t Made?

If you can’t agree Child Maintenance between you there’s always Negotiation Collaborative Law or Mediation.

Otherwise you will need to apply to the Child Maintenance Service for help. A fee is charged. If the paying parent fails to make the payments, the CMS can collect them for you.

How Much Child Maintenance Will I Get?

This online calculator is a useful guide.

What About Children Who Are Over 16 But Not In Full Time Education? 

The age stipulation for Child Maintenance through the Child Maintenance Service can be a worry especially if your child is disabled. If you can’t agree payments, an application may be made to the Court under Schedule 1 of the Children Act.

What About School Fees?

There is no provision for the payment of school fees under the Child Maintenance Service. If you can’t agree, you can make an application to the Court under Schedule 1 of the Children Act.

How About Unmarried Parents? 

Here again, an agreement reached privately between parents is the ideal. Failing which, there is Negotiation, Collaborative Law or MediationOtherwise make an application to the Child Maintenance Service.

But the Child Maintenance Service can only help so far – it cannot provide lump sums or housing. And in the case of unmarried families there is no opportunity to obtain Court orders during the divorce process. But there’s always Schedule 1 of the Children Act. An Application may be made for a lump sum, or for the transfer of property.

What If The Paying Parent Lives Abroad?

If you’re part of an international family, and the paying parent lives abroad and isn’t paying Child Maintenance, the answer is to make an application under Schedule 1 of the Children Act. But check with the Child Maintenance Service first because there are exceptions to the rule that it doesn’t deal with paying parents abroad.

What If the Paying Parent is Very Rich?

The Child Maintenance Service can only assess income of the paying parent up to £3000 gross per week. So if you need a top up, the answer is to make an application under Schedule 1 of the Children Act. The question of school fees can also be addressed.

If you’re unmarried, this could be your opportunity to apply for a transfer of property or for a lump sum in order to provide the children with a home and other needs.

Child Maintenance Options

Contact  Joanne Houston on 01962 217640 for free advice on Child Maintenance Options. In this 20 minute session we will review your situation and how you can achieve your objectives.

See my linked blog Maintenance and Clean Break on Divorce 

  • Who’s entitled to Spousal Maintenance? How’s it calculated?
  • What’s a Clean Break, and is it the answer?

Also see my blog What Comes First Divorce or Settlement about how to get the best divorce for you. 


JUST FAMILY LAW are specialist divorce and family law solicitors offering personalised legal solutions. We offer collaborative law which is especially relevant in providing solutions tailored to your family’s needs. This includes same sex couples and their families. Visit our website just-family-law.com The topics covered in this blog post are complex and are provided for general guidance only. Therefore if any of the circumstances mentioned in this blog have application to you, seek expert legal advice.

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Collaborative Law & Divorce: The Importance Of Assertiveness

I have guided many clients through the collaborative law divorce process and I have noticed a common theme. Many simply do not know how to assert themselves. Perhaps this is because they have lived for years with a forthright and dominating partner? Maybe it’s been easier to acquiesce?

But with the marriage over, and the rest of their lives to deal with, the time for acquiescence has gone. It’s time to be assertive.

A Collaborative Law Divorce Can Forge A Positive Future For Families

It can also provide a life changing learning experience in assertiveness.

I remember in particular a client I will call Rebecca. She travelled the world with her husband, Geoffrey. They rarely stayed in one country, let alone one home, for long. Her family – her husband and three tiny children – were her entire life.

But she told me Geoffrey had left her and was eager to negotiate a quick settlement. He wanted to put the marriage behind him. She was tearful and anxious because she simply had no idea what to do. Where would she live? Where would the children go to school? Would their father remain a positive influence in their lives? Would she have enough money?

Collaborative Law Divorce: The Process

I told her about the collaborative process and how I could help her as her collaborative lawyer. She would be able to resolve the issues that concerned her, negotiate the necessary arrangements, and make the right decisions for her family.

I would sit at her side in meetings with her husband and his collaborative lawyer as her voice, support, and legal adviser.

Collaborative Law Divorce And Life Coaching

Rebecca was interested in a collaborative law divorce but said she feared conflict with Geoffrey. She would never find the courage to stand up to him. Furthermore she feared he would simply turn his back on her and the children forever.

And she was anxious about the cost of the divorce. Would the outcome leave her and the children in penury?

I gently reminded her she must try to think long term. Would she consider consulting a life coach? I could recommend one who specialised in the difficulties arising from marriage breakdown. Other clients had found new confidence as a result. They had been able to deal with painful issues, and achieve a level playing field.

Rebecca thought about my suggestion. A few days later she got back to me and said yes, she would like to go ahead.

The Power Of Assertiveness In The Collaborative Process

I introduced Rebecca to a life coach. They made great strides together. It wasn’t long before we were able to start the collaborative process.

Rebecca was now able to face all the issues head on, and state her point of view with conviction. In addition she now realised she had the right to express her views, refuse settlement proposals, and offer her own ideas. It was a pleasure to sit by her side and guide her.

If in the collaborative process you are assertive, and focused on your needs, you will achieve the best settlement for yourself and your family, long term. And as a result the experience will help you manage your family better after your divorce. In particular the unreasonable demands and expectations of others.

The assertiveness you have learned during the collaborative law divorce process will help you plan financially for the future.

In Conclusion

The experience of your collaborative divorce will be your first step to developing your independence and autonomy in your newly formed, separated family.

Phone Us For A Free Consultation …

Phone Joanne Houston on 01962 217640 for a free 20 minute consultation on these important issues.

JUST FAMILY LAW are specialist divorce and family law solicitors offering personalised legal solutions.

We offer collaborative law which is especially relevant in providing solutions tailored to your family’s needs, including same sex couples and their families.

Visit our website just-family-law.com

The topics covered in this blog post are complex and are provided for general guidance only. Therefore if any of the circumstances mentioned in this blog might have application to you, you should seek expert legal advice.

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Brexit, Family Law And Divorce

 

See February 2019 update, What Does Brexit No Deal Mean For Family Law 

Brexit will affect international families involved in family law disputes.

Are you part of an international family?

Let’s use the example of Sarah and Pierre. She was born in England, he in France. They married ten years ago and have two children, both of whom were born in France. The marriage has broken down and Sarah has returned to England and, with Pierre’s agreement, she has brought the children with her.

You are part of an international family if you live in the UK but were 
born in another EU country. Or if you were born in the UK but move to 
another EU country. Or perhaps your ex was born in another EU country 
or moves to another EU country.

Brexit And Family Law: What Is The Significance?

Many of the important steps in Sarah and Pierre’s divorce are determined by EU rules. For example EU rules ensure court decisions made in one EU country are recognised in other EU countries.

Vital EU rules apply to divorces and family law in the UK.

Brexit And Family Law: EU Rules Decide Where To Start Court Cases

The importance of these rules cannot be overstated. Otherwise there 
can be family law cases in courts in two different countries at the 
same time.

Sarah and Pierre can’t agree in which country to start their divorce. Pierre urgently needs an order setting out when he can see the children. Sarah urgently needs a maintenance order. She starts divorce proceedings in England, which means Pierre can’t ask the French courts to make decisions. All the issues that concern them – the divorce proceedings, questions about the finances, how much time the children are going to spend with Pierre – are decided in England. But the English orders are enforceable in France.

Without EU rules, Sarah and Pierre could have proceedings going on in England and France at the same time leading to tremendous confusion, expense and delay.

EU rules decide in which country you can start your divorce and 
obtain a financial order. Without these rules couples who can't 
agree upon a country could face lengthy and expensive court cases. 

EU rules decide in which country you can start cases about your 
children, too. And these rules say it's where the children live. 
Without these rules there could be court proceedings about the 
children in two different countries at the same time.

Brexit And Family Law: EU Rules Streamline Child Abduction Cases

Do EU rules have anything to do with the Hague Convention’s role in child abduction? Yes, they are very significant. EU rules ensure a court in the child’s home country makes the final decision. This can mean the difference between a child returning home or not.

So if Pierre doesn’t return the children from France after a contact visit, Sarah knows a court in England will review any decision made in a French court.

EU rules will soon tighten up the Hague Convention by allowing the court to hear evidence from the child. EU rules will also impose a time limit of six weeks for the court to give its judgment.

Children who have been abducted are likely to be traumatised. 
Any delays and uncertainty in the procedure are to be avoided.

Without EU rules child abduction cases under the Hague Convention would take much longer. They wouldn’t take into account the child’s wishes. Furthermore there wouldn’t be an automatic review in our courts of the decisions of other EU courts.

Brexit And Family Law: EU Rules Allow Enforcement Of Family Orders In Other EU Countries

Sarah obtains a maintenance order against Pierre. Because of EU rules, this order can be enforced in the French courts. Pierre will have to pay Sarah maintenance even though she lives in England, and he lives in France.

If you obtain a court order you need to know it will work in 
other EU countries. 

These are orders concerning children, who sees them and where 
they are to live, maintenance, financial orders, and domestic 
abuse. And in particular orders made by consent.

Sarah and Pierre are able to agree the matrimonial finances which means they have avoided the stress and expense of court proceedings. They have a “consent order” made in the English court setting out what they have agreed. Under EU rules this is enforceable in France.

What Are The Options for Protecting International Families on Divorce After Brexit?

The Government is steering the European Union (Withdrawal) Bill 
through Parliament. This will bring all EU family law rules onto 
our books. 

But we will need new agreements to ensure EU family law rules 
remain reciprocal with other European countries.

When the European Union (Withdrawal) Bill becomes law,  we will absorb all EU family law rules into our system. This means we will be bound by them. So we need the remaining EU countries to be bound by them as far as this country is concerned, too. But this isn’t automatic because, of course, we will no longer be a member of the EU.

If both this country and the remaining EU countries are bound 
by the same rules, they will be reciprocal. But there must be 
agreements to ensure reciprocity as we will no longer be part 
of the EU.

The Government will need to enter into fresh agreements with the remaining EU countries to ensure the rules are reciprocal. It is vital we use this opportunity to knit our family law system and the EU family law system together. Because this will keep it fully functioning for international families.

But it is by no means guaranteed we will enter into these new agreements. The Government is concentrating on trade and other important agreements. Family law is, perhaps understandably, low on the agenda. But various family law organisations are lobbying Parliament about this important issue.

The Family Law Bar Association, the International Academy of Family Lawyers, and the family law solicitors’ association, Resolution, have published a paper, Brexit and Family Law. This paper sets out the options available to the Government, along with their recommendation to retain full reciprocity.

Why Parliament Needs To Enter Into Fresh Agreements For Brexit and Family Law Rules 

What could go wrong if there aren’t reciprocal agreements for Brexit and Family Law rules.

Imagine a situation where Sarah starts the divorce in England and shortly afterwards Pierre starts the divorce in France. The French court would not recognise Sarah’s proceedings in England, or any of the orders made. But the English courts would recognise the orders made in the French court. Both Sarah and Pierre would be involved in protracted and expensive court cases in both countries to sort out the resulting confusion.

Without reciprocal agreements we would lose the straightforward 
enforceability of orders in EU countries concerning maintenance 
and children. 

And the question of where to start your divorce case or your case 
about the children will be unnecessarily complicated.

What About The Court of Justice of the European Union?

The Court of Justice of the European Union has an important role 
in the updating and interpretation of EU family law rules. But 
the Government wants to end all links with it.

What are the implications of merging EU family law rules with our laws, but ending our links with the Court of Justice? Changes in interpretation of these rules, and amendments to these rules, will apply to all the remaining EU countries, but not to us.

This will cause confusion for international families. Here again 
Sarah and Pierre may become involved in lengthy and expensive court 
cases simply to decide fine points of legal interpretation.

Family law organisations are proposing to Parliament we maintain links with the Court of Justice of the European Union. This means we would be able to have our say in EU family law procedure and interpretation, and keep our laws and rules up to date. This would ensure continued fairness for international families in this country. It has no implications for sovereignty.

Should I crack on with my divorce or wait a bit?

If you are keen to divorce in a particular country for financial reasons you should seek legal advice without delay

I’m not sure what to do in the meantime. Can you help?

Yes of course. Here at Just Family Law we’re closely monitoring the situation and are up to speed with all changes as they occur.

Phone Joanne Houston on 01962 217640 for a free 20 minute consultation on these important issues.

JUST FAMILY LAW are specialist divorce and family law solicitors offering personalised legal solutions.

We offer collaborative law to provide you with solutions tailored to your family’s needs – including same sex couples and families.

Visit our website just-family-law.com

The topics covered in this blog post are complex and are provided for general guidance only. If any of the circumstances mentioned in this blog might have application to you, you should seek expert legal advice.

image credit: Happy Families by Catherine Scott on Wikimedia (filter applied)

 

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Tax And Divorce – Whether UK Or Non UK Resident, You Need To Consider Income Tax, Capital Gains Tax and Inheritance Tax Liability

Our guest blogger, Megan Saksida 

“The impact of tax on divorce can be critical, especially for international families. It’s vital to take expert advice from an accountant when considering a financial settlement. I’ve set out the main points to consider in this blog, and a brief Summary at the end,” says guest blogger Megan Saksida, Chartered Accountant, of Meganomics and lecturer and writer on private client taxes.

Divorcing? There are likely to be tax implications. But firstly, where do you both live?

How long have you been non resident? Do either of you intend to return to the UK? All these questions have tax consequences.

An expat who doesn’t work may find on a “day count” basis he or she is tax resident in the UK despite living elsewhere in Europe. This could be because you go back and forth to the UK.

And did you know you can be resident for tax purposes in more than one country? It could be necessary to consider the Double Tax Treaty to determine which residence takes precedence.

How does Non-Resident Capital Gains Tax (“NRGCT”) apply to your residential property in the UK on divorce?

Residential property is usually the major asset in a divorce settlement. For both resident and non resident tax payers there can be tax implications.

“NRGCT” is charged on gains accruing on disposal of UK property if it is not exempt under main residence rules (see below), and you are not resident in the UK in the tax year in which the transfer occurs.

Please note – the NRCGT rules take precedence over the temporary non-residence rules (see below).

What are the tax rates? Eighteen and twenty eight percent (depending on your personal circumstances), and only gains made since 6 April 2015 are taxed.

There are three methods for calculating NRCGT gains:

  • The default method, which applies unless you elect otherwise. This uses the market value as at 6 April 2015;
  • Apportionment of the whole of the gain/loss over the time the property was owned;
  • The whole gain or loss (which is only advantageous for a loss).

Can UK property be elected as a non-resident couple’s main residence in order to reduce tax on divorce?

Yes, you can make an irrevocable main residence notification on the NRCGT Return. This can apply retrospectively to any period of prior ownership.

Is there an existing nomination? The nomination on the NRCGT Return is treated as superseding it.

Please remember it is essential both of you affirm this nomination to HMRC, irrespective of which party legally owns the property.

If only one of you owns the property you must submit a Return with a written notification from the other confirming agreement to the nomination. This is because the rules state a couple can only have one main residence between them.

What qualifies as ‘the main residence’ in order for the gain to be exempt?

The property needs to be occupied as your permanent residence.

If you are non resident, you will have an additional burden of proof which is the “day count” test. What’s the “day count” test? This is where you are present in the dwelling for at least ninety midnights in a year. And if your spouse or civil partner was in the property instead, this will count towards your total.

Do you have more than one UK residence? All stays at both dwellings count towards the ninety day test.

If the “day count” test is reached and the home is eligible for main residence relief, no chargeable gain arises for UK tax purposes irrespective of your country of residence at the time of the divorce.

But be warned –  your tax position in your country of residence also needs to be considered.

Is the former main residence for CGT purposes still owned by either of you? What’s the significance of the 18 months rule?

If the property was your former main residence for CGT and it continues to be owned by either you or your ex more than eighteen months after the other leaves the property, then tax may be payable when the property is sold.

This means the leaving spouse should take tax advice if you continue to own the former marital home even though you no longer live there.

Don’t forget the NRCGT time limits

An important practical point to note is if you make a NRCGT disposal you must report the disposal to HMRC within thirty days. Tax on NRCGT gains is generally due thirty days after sale.

What about tax on divorce on everything other than residential property? What are the rules?

  • UK residents are taxed on worldwide income and gains.
  • Non UK residents are only taxed on income generated in the UK.
  • Non UK residents are not taxed on capital gains unless they become “temporarily non resident” (see below), although the rules for gains on residences and businesses are different.

Are you resident, or non resident, in UK for tax purposes?

What is the test for residence?

It’s complicated but boils down to day counts, working hours, the availability of a home in the UK, or your personal ‘ties’ to the UK.

How does this apply in practice?

I’ll give you an example. Say if you live in France, own a home in the UK, and don’t work. Your minor children are at a boarding school in the UK and you spend the school holidays with them in the UK. For tax purposes you might be defined as resident in the UK. How is this relevant to divorce? You could be liable in the UK for your worldwide income and gains under the terms of your financial settlement.

During the marriage you may have been non UK resident for tax purposes, but you now wish to return to live in the UK. What does this mean for tax on divorce?

It depends how long you have been out of the UK and a non UK tax resident, and when the marital assets are sold or transferred.

Are you “Temporarily Non-Resident”?

A non UK tax resident living outside the UK is not taxed on their capital gains unless they are deemed “temporarily non-resident”. This happens when you live outside the UK for less than five years, and you were a UK tax resident for at least four of the previous seven tax years prior to leaving.

If this applies to you, any capital gains made while living outside the UK, on assets held before you departed the UK would become chargeable in the year of your return to the UK. This means even if there was no initial liability to CGT because you were non resident for tax purposes, the charge would now apply.

What is the significance of the date of separation on tax on divorce?

It’s crucial.

A trial separation is not relevant, but permanent separation is relevant for both income tax and capital gains tax.

But when is a couple officially separated? For both income tax and CGT there are three possibilities:

  • There’s a Court order;
  • You have a Deed of Separation;
  • You are separated in circumstances in which the separation is likely to be permanent.

The third option depends on your individual circumstances. You will need to provide evidence to show when the decision was made to separate permanently, and it’s not necessarily the date one of you left the marital home.

Sometimes a decision may be made by one partner and not communicated to the other.

The date is crucial, especially for CGT.

What happens when matrimonial assets are distributed in the same year as the permanent separation in the case of a UK resident? 

First of all, income –

Both of you are taxed independently on income earned in the UK, and worldwide, and you have your own personal allowance.

It may be during your marriage you decided to share income from assets unequally to maximise tax efficiency. But on divorce the Court has wide powers to divide assets irrespective of ownership. The assets can be split equally or in other ways.

Please note – any prior declaration of beneficial interest to HMRC ceases to have effect after permanent separation, and you will be taxed according to your actual beneficial ownership.

Secondly, capital –

In the case of CGT, if you transfer assets to each other under the financial settlement in the tax year of the permanent separation, this is on a “no gain, no loss” basis, just the same as during the marriage.

But there’s a rule – you must have lived together at some point during the tax year.

Assets are distributed in a tax year after permanent separation, but before divorce. What are the implications for tax on divorce for a UK resident?

In the case of CGT, if assets are exchanged in a tax year during which you are not living together, but before decree absolute (which brings your marriage to an end), it’s bad news.

This is because the assets will be deemed to be transferred at market value, and CGT could be payable. This is the case even if no money has been exchanged.

What happens if a non UK resident permanently separates in the same year as the assets are distributed?

You are not liable for CGT for any capital disposals in the divorce settlement except residential property (see above) and business assets.

Even if you return to the UK during or after the divorce, the rules for “temporary non-residence” are not relevant, as the transaction is excluded under the “no gain, no loss” rules.

What is the liability of a non UK resident when assets are distributed in a tax year after permanent separation, but before divorce?

Any assets transferred in a tax year during which you are not living together, but before the decree absolute, would not be subject to CGT if you are non UK resident (except for residential property).

But there could be a tax charge in the country in which you live, and local tax advice should be sought.

If you choose to return to the UK and are rendered “temporarily non-resident” (see above) CGT could be chargeable.

What about Inheritance Tax?

Liability to Inheritance tax depends on the date of the decree absolute. Before, transfers on divorce are not chargeable. After, they are only chargeable if there is intent to confer gratuitous benefit.

But be careful if one of you is domiciled UK and the other not. There are restrictions on how much can be transferred and tax advice must be taken.

What about your, or your ex’s, unused IHT nil rate band?

If one of you dies after divorce and hasn’t remarried any unused nil rate band will remain unused.

Maintenance to children and former spouses, and gifts to children. Liable to IHT?

Maintenance to children and former spouses is exempt from IHT, but gifts to children not for their education, maintenance or training, could be chargeable if not habitual, and out of income. It’s best to take tax advice in these circumstances.

In Summary

Always consult an accountant

Whether you live in the UK or elsewhere, always consider your potential liability to tax on divorce. Consult an accountant.

Even if you don’t live in the UK, you can be liable to CGT on the sale or transfer of UK  residential property

Can you claim exemption under main residence relief?

Beware the 18 month rule …

Beware of either or both of you retaining a property, nominated as a main residence, for eighteen months after divorce – you can find yourself with an unexpected CGT liability.

… or being deemed a UK resident …

Even if you don’t habitually live in the UK, the Statutory Residence Test legislation may consider you do for tax purposes. You could end up being liable to pay CGT on the sale or transfer of assets in the UK and elsewhere.

… or temporarily non resident

Think you are excluded from CGT liability because you were non resident for UK tax purposes? If you return to the UK you may become liable because HMRC may consider you were only “temporarily non resident”.

Liable to pay tax in more than one country?

The Double Tax Treaty is helpful on this point.

WARNING – date of separation and date of divorce

The date of permanent separation, and the date of the decree absolute (which brings your marriage to an end), are crucial when considering liability to CGT. Whether you live in the UK or elsewhere, you might find yourself with an unexpected tax bill. You need to consult an expert family law solicitor to navigate these tricky points.

And Inheritance Tax?

Divorce can have consequences for Inheritance Tax liability.

Contact Megan Saksida on +44 7521 082 546 or Email: meg@meganomics.co.uk Contact Joanne Houston of Just Family Law on 01962 217640 for a FREE telephone consultation on any family law issue

JUST FAMILY LAW are specialist divorce and family law solicitors offering personalised legal solutions.

Visit our website just-family-law.com

The topics covered in this blog post are complex and are provided for general guidance only. If any of the circumstances mentioned in this blog might have application to you, you should seek expert legal advice.

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10 Points About Child Abduction, UK/EU Families & Summer Holidays

1. It’s the summer holidays and either you or the children’s other parent are planning to take them home to visit their grandparents. But if home is abroad, there could be more to worry about than just queues at the airport. Is there a risk of child abduction?

2.   Life has never been more complicated for families where one or both parents are from another EU country. Are you both planning to stay in the UK, or are you both planning to leave? It’s a difficult and painful decision to make.

3.   Perhaps you want to stay but the other parent doesn’t? The risk is the children will be taken abroad without proper consent, or won’t be returned from their summer holidays.

4.   If one of you wants to take the children abroad – even for just a holiday – this must either be with consent of the other parent or a court order. Otherwise it will be a case of child abduction, an imprisonable offence. This also applies if there is a child arrangement order and they are taken abroad without consent for more than twenty eight days.

5.   If parents cannot agree about taking the children on holiday abroad, or where the children are to live, it is vital to take advice from a solicitor experienced in international family law. Perhaps you will be able to reach an agreement with the help of mediation or collaborative law.

6.   If all else fails you will have to make an application to the court. The court’s top consideration will be the welfare of the children.

What Happens In The Case of Child Abduction?

7.   What happens if the children are either abducted to, or retained after a holiday in, another EU country? All EU member states are signed up to the Hague Convention. An application can be made for a court order they be returned.

8.   Where will the court case be heard? EU rules say it’s the country where the children generally live but when we leave the EU we will lose this rule. Will a court order made in the UK be enforceable in other EU countries? Yes, but after we leave the EU we will also lose this rule.

9.   The Government must incorporate these EU rules (and others which tighten up the Hague Convention), and make fresh agreements with the other twenty seven EU countries in order to make the rules reciprocal. Otherwise the effectiveness of our laws against child abduction will be undermined. To put it simply, children might not be returned.

10. After we leave the EU it will still be possible to pursue child abduction cases under the Hague Convention but unless the Government acts before we leave, life for international families in this country is set to become increasingly difficult and uncertain.

Contact us on 01962 217640 for a free telephone consultation on this or any other family law issue

JUST FAMILY LAW are specialist divorce and family law solicitors offering personalised legal solutions.

Visit our website just-family-law.com

The topics covered in this blog post are complex and are provided for general guidance only. If any of the circumstances mentioned in this blog might have application to you, you should seek expert legal advice.

image by Sara&Joachim&Mebe on Wikimedia

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Why You Need a Family Solicitor

Now’s the time to find a family solicitor because if your relationship has broken down the decisions you make could affect you for the rest of your life. Don’t leave anything to chance – family law is complicated and is always changing.

You may be feeling overwhelmed by all the issues you are facing, their complexity and how they are affecting your life. Your solicitor will help you understand which issues should be dealt with as a priority and, using their experience, guide you through the best process for you to get to the light at the end of the tunnel.

And no, it’s not a good idea to share just one solicitor, whatever your partner says. Imagine you’re playing Andy Murray in the Wimbledon final. You wouldn’t expect Ivan Lendl to be your coach as well as Andy’s would you? You’d want your own coach.

Would you mend your own washing machine? I’d say that doing your own divorce and mending your own washing machine are equally as risky – unless of course you’re a fully qualified family solicitor with a side line in mending washing machines (in which case I may have a job for you!). DIY divorce and DIY washing machine repairs – both equally fraught with danger and definitely best left to the experts.

Go to your friends for emotional support – that’s vital. But there will always be those who have their own take on what you should be doing, probably guided by their own experience. But no two divorces are they same. If you broke a bone you wouldn’t ask your friend what her x-ray showed, or your cousin how her cast was set, would you? You’d go to the hospital yourself.

Have you already reached an agreement between you? I’ve heard this many, many times, and it can be a good starting point. But sadly there are many reasons why it rarely works out. It may be unfair on you. It may be impractical or impossible to put into effect. It may not include all the assets of the marriage. An apparently valuable asset may turn out to be burdened with a huge mortgage. A pension may turn out to be surprisingly valuable and impossible to ignore.

It’s important to get the right family solicitor either through personal recommendation or the Resolution website. Don’t be afraid to ask a solicitor questions. Does she specialise in family law? What is her experience? You need someone who not only specialises in family law, but has done so for a considerable period of time.

Ask her how she can help you. She should tell you she will advise you of your options and how much they’re likely to cost. Ask her what the likely outcome will be. She won’t be able to go into any detail at this early stage, but she’ll be able to give you a rough idea.

A good family lawyer will have been through this dozens and dozens of times, and will be able to advise you and protect you and get the best settlement for you and your family. In the long run a good family solicitor will help you save time and money, and she will obtain a better settlement for you than you could get on your own.

Is your relationship in the ambulance waiting to go into A&E? If there are still sparks of life a good family solicitor will recommend couple counselling. A conversation with a properly qualified counsellor might help your partner see things from your point of view.

A good family solicitor will say, How about mediation? Or she might suggest collaborative law. Both are proven methods of saving time and money and keeping things amicable. You will avoid a lengthy dispute, or, worst case scenario, court proceedings. And remember, the amicable approach is usually the best especially where there are children involved.

So make sure you’ve got the right person in your corner: a family solicitor. And next time, maybe talk to a family solicitor about a prenuptial agreement before the wedding.

Did any of the experiences I mention in this article ring a bell with you? If you have an opinion, please leave a comment below. We would be interested to read it. And please sign up for our next blog by clicking “Notify Me of New Posts by Email”.

JUST FAMILY LAW are specialist divorce and family law solicitors offering personalised legal solutions.

Visit our website just-family-law.com

The topics covered in this blog post are complex and are provided for general guidance only. If any of the circumstances mentioned in this blog might have application to you, you should seek expert legal advice.

photo of Andy Murray and Ivan Lendl by Kate on Flickr (photograph resized and brightened)

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