Anti-avoidance measures in the Context of Divorce

Spouses can make a financial claim on divorce. In a financial claim on divorce, it is generally, the net value of matrimonial property (which belongs to the spouses at the date of the parties’ separation) is shared fairly between the spouses. Matrimonial property includes property such as savings, property, businesses, income from rental property, pensions and investments. All matrimonial property held by the spouses at the date of separation goes into the total value of the matrimonial pot.

Concerns may arise where one spouse exclusively manages the family finances or they may be more familiar with the finances that the other spouse. That can lead to difficulties for the one spouse as the other may seek to conceal or transfer matrimonial property to reduce the other spouse’s financial claim on divorce. It is not possible to list a complete list of circumstances in which anti-avoidance measures in a divorce may be needed. However, a typical example would be where one spouse gifts shares in a company to a third party. The consequence of this transfer would be to reduce the total value of the matrimonial property. The effect of that reduction would be to defeat, in part, the share of the financial claim which the second spouse has on divorce.

The law in Scotland provides several mechanisms to ensure that the total value of matrimonial property is not diminished. One mechanism is that an application can be made to the court to reverse a transfer or transaction which defeats (in whole or in part) a spouse’s financial claim. Strict timescales exist for that application. There are other mechanisms which can help identify whether such a transaction has taken place and the court also has the power to stop any further transfers or transactions. Our solicitors have experience in this area and have a track record for maximising financial claims in divorce proceedings.