While many people dream of marriage and then living happily ever after, unfortunately, a high percentage of Scottish couples end up divorcing. When this happens, the division of assets can be a complex and often contentious process - particularly when assets are held overseas.

The division of matrimonial assets in Scotland

In an increasingly globalised world, it is now common for couples to hold assets abroad. Whether acquired through inheritance, investment, or as a result of an international romance, these foreign holdings must be properly assessed and accounted for during divorce proceedings.

Are overseas assets considered matrimonial property?

Whether an asset is located in Scotland or overseas, regardless if it was acquired during the marriage or not, it generally forms part of the matrimonial property and is subject to division.

Common examples of foreign assets include property that was purchased as a holiday home; investments and shares in foreign companies; bank accounts held in overseas financial institutions; and business interests located abroad. They may also be pensions or retirement accounts held in another country or valuable personal property such as art, antiques or vehicles located overseas.

Both parties must disclose all assets to ensure a fair settlement. If a party fails to disclose an overseas asset, this could lead to serious legal consequences.

What if a party hides assets abroad?

Although the vast majority of couples are transparent about their financial situation, there are instances where one party may attempt to conceal assets located in another jurisdiction. If there is suspicion that assets are being hidden, the Scottish courts can take action.

Possible steps to uncover hidden assets include the court ordering the other party to disclose financial documents, or appointing a commissioner, who can be instructed to make inquiries and obtain relevant information. Plus, family, friends, or professional contacts in the country where the asset is held may provide useful insights and local intelligence. Correspondence such as emails, messages, and transaction records may also reveal evidence of undisclosed assets. Lawyers or financial investigators with expertise in the country where assets are suspected to be hidden are another means of providing assistance.

If hidden assets are discovered after a divorce settlement has been reached, the court has the power to reopen the case and adjust the division of property accordingly. Furthermore, penalties for concealing assets can be severe.

Are foreign assets more difficult to manage in a divorce?

While it may seem foreign assets could complicate proceedings, in most cases, they are treated in the same way as assets located in Scotland. However, some unique challenges may arise; for example, the country where the asset is held may have different property laws and regulations, or the value of assets in foreign currencies may fluctuate and change over time.

In addition, selling or transferring foreign assets may have tax implications that need to be considered. Another potential hurdle to overcome is, if one party refuses to comply with the court’s decision, enforcing the order in another country may require additional legal steps.

However, despite these possible obstacles, Scottish courts are well-equipped to consider foreign assets in divorce settlements, ensuring a fair division.

Practical steps for managing foreign assets in divorce

If you or your spouse own overseas assets and are going through a divorce, the first step is to identify and document all foreign assets - including property, bank accounts, investments, and any other valuable holdings. A clear and comprehensive record of these assets will provide a strong foundation for legal proceedings and ensure that nothing is overlooked.

Next, obtain accurate valuations of these assets. The value of foreign properties, investments, and bank accounts can fluctuate, and professional financial experts can help determine their current worth. Having precise valuations will allow for a fair and transparent division of assets.

Seeking legal guidance early in the process is highly recommended. A solicitor experienced in international asset division can provide crucial advice on how foreign jurisdictions may impact the proceedings. They can also help navigate complex legal frameworks that differ from Scottish law, ensuring compliance with all relevant regulations.

Tax implications should also be carefully considered. Different countries have varying tax laws, and transferring or selling foreign assets may result in unexpected liabilities. Consulting a tax specialist can help.

Finally, enforcement of court orders in foreign jurisdictions should be planned for in advance. If an asset is located in a country with different legal standards, it may require additional steps to ensure that a Scottish court order is recognised and enforced. 

Seeking legal advice

Given the complexities involved in identifying, valuing, and dividing overseas assets, it is essential to seek specialist legal advice. An experienced Scottish family law solicitor can guide you through the process, ensuring all assets are accounted for and securing a fair outcome. They can provide expert advice tailored to your specific circumstances, helping you navigate the legal landscape with confidence.