International pre-nups and Settlement Agreements

Press articles over the last couple of years have reported an increase in Parisians moving to London to avoid new tax legislation and levies on their wealth in France.

This is leading to a continuing housing boom in places such as South Kensington and Belgravia. However French nationals moving to London to protect their wealth from tax may be putting their wealth at risk from divorce.

Traditionally, wealthy individuals in France will require their spouse to enter into a separation de biens agreement on marriage to keep their assets separate during their marriage and on divorce. In France this would mean that on divorce the French Court could make some provision for maintenance/compensation but broadly speaking a wealthy French individual could protect their assets from division.

However, they need to be aware that once they have lived in England for 12 months, the English Court would have jurisdiction to deal with their divorce and it would have a vastly different approach to the French Court.

For example, in the case of Z v Z involving a French couple living in London the English Court gave a French wife 40% of the assets, despite the fact that she had entered into a separation de biens agreement. There was also a similar case involving a Spanish national (B v S) where the wife received 50% of the assets and maintenance of £10,000 per month.

Therefore any wealthy individual moving from France to England should seek legal advice before taking up residence in London. It is likely to be in their interest to enter into an English postnuptial agreement or an additional agreement confirming that maintenance on divorce be dealt with by the French Courts rather than the English Courts. This would prevent the sort of order that was made in the case referred to above.

Of course, what is true for French nationals applies equally to any foreign national moving to England. Just because you have already have a foreign law agreement in place with your spouse this won't protect your assets on divorce unless it is compliant with English law.

Such matters can be considered in settlement agreements should a dispute arise.

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