End of the affair
Matthew Cameron of Ashton KCJ Solicitors looks at the various options available when international couples divorce
It is never easy to have to pick up the legal pieces after a couple have set about the process of a divorce. Irrespective of the emotional turmoil, the distribution or division of a couple’s jointly owned assets can prove particularly problematic. Add to that the further complications that can flow from ownership of property and assets over different jurisdictions, such as France and the UK, and the difficulties can seem substantial.
The first question that international couples may need to consider is where the whole process should be started. If we take the example of a French national and a British national starting a divorce, should they do so in France or in the UK? Does it matter if they were married in one country or the other (or elsewhere)? Does it matter which country they live in?
In practice, there is an international treaty that covers such situations. The result is that either jurisdiction – France or the UK – would be competent to accept the proceedings. This also remains true where, for example, the husband and wife are both British but live in France. One would hope that the couple may be able to agree on the choice of forum, at least, although naturally this is not always to be guaranteed. In the absence of agreement on this point, the competent court is the one where proceedings are issued first.
Occasionally, family lawyers are able to advise on an initial ‘forum shopping’ exercise: the resulting distribution of the couple’s estate may differ, depending on the choice of jurisdiction and, therefore, it is possible to seek a consultation with one or two lawyers to consider this point before proceedings are issued, to establish whether dealing with the case under English law or French law would be preferable. The reality here, though, is that if one party were likely to end up in a preferable place, then the other party’s final position on the divorce would be worse.
There are now regulations (Rome III regulation) that allow extra choice to the divorcing couple, although perhaps with not so much of a potentially contentious edge. This means that it may on occasion be possible to apply the laws of one country in the court of another. Thus a UK couple having previously moved to France permanently could then require the French court to apply English family law to their divorce, which they could then leave to one or two local avocats to manage. The only other way they would have been able to do this before would have been to ensure that proceedings were issued in the UK. And while it is indeed possible to manage some divorce matters with little or no involvement by two firms of solicitors in England and Wales, this is almost inevitably going to be extremely complex, if not impossible, where there is an extraneous element such as property and estate in another jurisdiction, as would be the case here.
The regulations have not been ratified by the UK. It is not therefore possible for foreign nationals living in the UK to apply the rules of their own nation through the English court, although this is unlikely to be of any concern to readers of Living France.
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Aside from these legal issues, there are a number of other points that must be considered when a couple finds itself in the invidious position of a divorce.
The first is that while the court may order – as part of an order for the distribution of the couple’s estate – that an interest in any particular property be transferred from one party to the other, it is as true in France as in the UK that this court order only imposes an obligation on the parties to complete the transaction: it does not complete the transfer itself.
The process in France for completion of the transfer is strict: there are only limited ways in which a property can be transferred between a divorcing couple, without risk of either offending the rules of French inheritance law or incurring a substantial gifts tax liability, or perhaps both. If the divorce is proceeding through the English court, it is necessary to prepare an order that will not only be suitable for English law purposes, but that will also be acceptable in France. Once the order is sealed by the court, this can then be produced to the notaire who is charged with transferring the property into the name of one party.
Care must be taken on the timing here, to limit the cost imposed by the notaire. It is also important, though, to make sure that the whole English court order is drawn up in a manner suitable for use in France. That does not just mean that it needs to be in French, although a translation will almost certainly be imperative, together with legalisation by a suitable bilingual solicitor or notary public. If the court order is not drafted in a particular manner, it is possible that the costs the notaire charges for the transfer could rocket out of all proportion with the rest of the process, or the size of the property involved.
A further complication can arise where the French property is subject to a mortgage. It may be easy for the court to order that the party to whom the property is being transferred will bear all responsibility for the mortgage in the future. However, the bank may want a say in this as well. If the property is indeed to be transferred, then the bank will need to agree to that transfer and consent to one party taking up the loan. There are strict lending requirements in France, and it is certainly possible that one party’s personal situation may not be sufficiently strong to qualify for a French mortgage in his or her own right. Discussions with the bank at an early stage are often therefore to be recommended. These can occasionally prove quite lengthy in themselves.
All of this leads to a situation where, while the divorce itself may be sufficiently stressful on its own, it is highly possible that other matters will need to be reviewed and clarified. The intervention of specialist solicitors may well be a great benefit. LF
This article is for general information purposes only and does not constitute legal or other professional advice. We would advise you to seek professional advice before acting on this information.