Ring-fencing divorce assets
A landmark Court of Appeal ruling has given an oil and gas entrepreneur the right to exclude all of his pre-marriage assets from a divorce settlement.
The ruling also found that he must raise the settlement to his ex-wife from £5m to £8m.
This ruling is likely to provide some comfort to wealthy business owners or individuals who have inherited wealth before a marriage, allowing them to ‘ring-fence’ these assets in the event of divorce.
It means that, provided there are sufficient assets to meet the needs of both parties, assets brought into a marriage do not need to be shared on divorce.
The original ruling found that 60% of the value of the business (around £15m) had been accumulated prior to the marriage. It left 40% of the business sale proceeds to be split equally between the husband and wife.
The wife, Mrs Jones, contested the ruling on the basis that she should be paid £10m rather than the intended £5m. This resulted in the earlier ruling being overturned on appeal but also the valuation of the business being reduced to £9m due to ‘passive growth’ as rising markets pushed up the value of the business.
This ruling follows the Radmacher ruling in the UK Supreme Court in October, which we discussed in detail here.
Photo credit: Flickr/swanksalot