Family Law Blog

Developments to the family courts

18 September 2015, by Taylor King Family Law Solicitors

The Law Society’s Family Section has issued an update to the changes to the Family Courts. This update includes:
1. They expect all the divorce work from London, which was being transferred on a phased basis, to be processed from Bury St Edmunds by October 2015. It is expected that the Bury St Edmunds divorce centre will issue approximately 40,000 petitions a year.

2. It is expected that changes to the divorce petition will be introduced by the end of September 2015.

3. Guidance is being developed on what would constitute ‘urgent’ work, examples would include applications to set aside transactions or jurisdictional disputes. For now, the local courts can still issue urgent work.

4. The Financial Remedies Unit has been established as a specialist unit within the Central Family Court to efficiently handle complex financial cases. In order to be transferred to the FRU the case must be sufficiently complex and a Certificate of Financial Complexity completed. The certificate requires details of the total value of the assets with tick boxes flagging up any other potential areas of complexity including:

a. Complex asset or income structures

b. Non-disclosure (this may become more relevant subject to the outcome of the appeals to the Supreme Court of Sharland and Gohil)

c. Assets held offshore or through offshore settlements, family businesses or unquoted corporate entities, or where there is an issue of the value of such entities

d. Expert accountancy evidence is required

e. There are issues over contributions or substantial arguments over matrimonial /non-matrimonial assets

f. Disputed allegations of obvious and gross conduct

g. Illiquidity of assets

h. Complex or novel legal arguments

If it appears that the complexity criterion may not be met the application will be sent to a judge of the FRU who may decide to send the application to Bury St Edmunds for issuing.

In July 2015 Mostyn J revised the asset thresholds for financial remedy hearings before High Court Judges. In order to be transferred to the High Court the total assets should exceed £15million, or the overall net income exceed £1million. If the assets are between £7.5million and £11million there should be substantial allegations or issues relating to non-disclosure, offshore assets, reliance on a pre/post nuptial agreement or significant third party interests. The only applications that will be transferred to the High Court where the assets are less than £7.5million are those involving a novel and important point of law.

Pension changes – NICs

06 August 2015, by Taylor King Family Law Solicitors

The New State Pension, replacing the old system, will affect those who reach state pension age on or after 6th April 2016.
Previously, if you had not contributed National Insurance payments for the requisite 30 years to obtain the full state pension, but your spouse/civil partner had, you could claim a full state pension based on their contributions.

However, if you reach state pension age on or after 6th April 2016 your state pension will normally be based on your own National Insurance contributions only.

Under the new state pension, your state pension may be worked out in a different way if you chose to pay National Insurance contributions at a reduced rate under the married women’s reduced rate election before 1977. If this is the case then you will get a state pension that is about the same as the full rate basic state pension of £115.95 per week and any additional state pension you built up before 6th April 2016. Under these rules you do not need to have the minimum of 10 qualifying years of National Insurance contributions to get a state pension.

Court fees rise

17 July 2015, by Taylor King Family Law Solicitors

The Ministry of Justice has unveiled plans to increase court fees. Fees for divorce proceedings will increase from £410 to £550.
However, fee remissions will still be available for petitioners who are on a low income with no capital resources. The Ministry of Justice has said that it will make this remissions scheme more generous than it currently is. It will increase the amount of disposable capital allowed to have to qualify for remission and will consider whether other forms of payment or benefit should be excluded from the disposable capital test.

Although there has not been an announcement as to when these increases are to come into effect, it is usual for there only to be a couple of days notice. Therefore, if you are thinking of a divorce, it would be cheaper to issue proceedings sooner rather than later.

Changes to the family courts

06 March 2015, by Taylor King Family Law Solicitors

The principal changes that that will come into effect from April 2015 are:

1. There are 11 divorce centres covering the North East (Durham, Doncaster, Harrogate and Bradford), the North West (Liverpool), Wales (Neath, Newport and Wrexham), Midlands (Nottingham and Stoke), the South West (Southampton); and London and the South East (Bury St Edmunds)

2. Divorce petitions and applications for financial remedy orders should be send by post to one of the centres mentioned above.

3. Where a hearing is required this will take place, where possible, at the preferred local court. The Family Procedure Rules Committee will be considering changes to the divorce petition and Form A to facilitate the choice of hearing venue on the forms.

4. The above does not currently apply to petitions for dissolution (with the exception of in the North East) but it will do in the future.

5. Applications for financial consent orders should be sent to the divorce centre that handled the divorce and will usually be dealt with by the District Judges at those centres. However, some may be sent to local hearing centres.

6. Where a financial remedy application has been issued and sent to a local hearing centre, the divorce will continue at the divorce centre. The divorce centre will notify the local hearing centres of the progress of the divorce.

7. There is no restriction on the issuing of urgent petitions, as long as there are District Judges onsite. As with point 3, changes are proposed to the divorce petition to highlight issues of urgency.

8. Applications to vary or discharge an order should be made to the divorce centre and, if necessary, they will be redirected to the local hearing centre.

Transfer of residence

10 February 2015, by Taylor King Family Law Solicitors

It is not common for the residence of a child to be switched from one parent to the other, simply for the reason that it is not in the best interests of the child to make such a drastic change – a factor that is the court’s primary concern.

However, in the case of RS v SS a father obtained a residence order for his two sons after years of the mother obstructing contact.As is often the case in residence/contact disputes a new partner can cause problems. The mother in this case suspected that the father had started a new relationship prior to theirs ending; a fact that was denied by the father. The mother’s view had formed part of the reason which led to the difficulties in this case.

In his application to the court in 2012, 10 years after the problems had started, the father stated that he had never had regular contact, the mother had repeatedly breached court orders, used financial matters as a barrier to contact and the boys were under pressure from their mother and afraid to stand up to her. He was effectively only seeing his sons in the school holidays and he complained that their attendance at school was poor. He stated that he had been subjected to verbal abuse, uncontrollable rage and erratic behaviour from the mother. The father stated that he had made the application for a residence order because he could offer stability to the boys and that it was the only way the boys would have a relationship with him.
In the same month as the father’s application the mother had threatened the father with an injunction after he contacted her to ask about holiday contact. She had left voicemails, which were played out in court, threatening to cut off contact and leave the country if he did not pay backdated child maintenance.
In her judgment, Judge Harris stated that she preferred the evidence of the father and demonstrated a far better insight into the needs of his teenage and pre-teenage boys, for example, around issues of guidance and boundaries, than the mother. She also stated that the mother was a very angry and wilful woman whose hatred of the father was almost pathological. The mother had prioritised her own needs and feelings at the expense of the needs of her children.
A problem that arises following an order for transfer of residence is that of how it is to be facilitated. In the case mentioned above it was relatively simple, the children moved to their father’s house the following day, which happened to be Christmas Day. Another way this can be achieved, where the child/children have negative views about the new resident parent, is to have a temporary foster placement with the new resident parent having substantial contact, gradually moving to the child/children moving to live with them full time.

Tax implications on divorce

22 January 2015, by Taylor King Family Law Solicitors

When a couple are married and have not separated, if they wish to transfer assets between each other they can do so without any capital gains tax implications. However, this tax benefit disappears at the end of the tax year following permanent separation. If the divorce is finalised in the same tax year as separation the tax benefit will end on the date of the divorce rather than the end of the tax year.

From a tax point of view the date of separation should ideally be 6th April thereby giving the divorcing couple an entire year to agree the transfer of assets between each other. However, the reality for most people is that by the time they start thinking about tax planning on divorce the capital gains tax exemption will be gone.

The Family Home

The family home is one exception to the above. It will qualify as being capital gains tax free on transfer if it has been the couple’s main residence throughout the entire period of ownership under the principal private residence relief. Principal private residence relief can be claimed if all of the following conditions are met:

  • One spouse or civil partner stops living in the family home because they have separated;
  • The partner that moved out has not formally elected with HMRC for another house to be their main home;
  • The partner that moved out later gives their interest in the family home to resident spouse/civil partner;
  • The other partner keeps living in the family home and their main house; and
  • The transfer is made as part of the divorce settlement.

If the parties agree that the former matrimonial home is to be sold after separation then the non resident spouse is only entitled to claim the capital gains tax relief for a period of three years from the date he/she moved out of the property. Therefore, departing spouses should ensure that the former matrimonial home is sold within three years of their leaving the property.

If, as part of a divorce settlement, the court orders that the former matrimonial home is not to be sold until the youngest child ceases full time education then the non resident spouse would still be entitled to the principal private residence relief when the property is sold. However, he/she would not be able to claim that relief on any other property in which they resided prior to the sale of the former matrimonial home.

Family Businesses

Businesses can also be transferred without a capital gains tax charge, i.e. sole trader businesses, interests in partnerships that are trading or shares in unquoted trading companies. However, the business must not be a property rental/investment business. There are detailed requirements and procedure that must be met so if this applies to you, please consult a tax advisor.

Income

Special income tax rules also apply to married couples in the case of income from jointly held property. Provided that at least one spouse is entitled to the income, the spouses are taxed under this rule as if they were sharing the income on a 50/50 basis. This rule ceases to apply on the date the married couple separate.

Inheritance Tax

For inheritance tax purposes, transfers/gifts between spouses are exempt transfers up until the marriage or civil partnership has been dissolved. Transfers made on divorce, or for the maintenance of the family are also exempt from inheritance tax.

How to convert your civil partnership into marriage

03 December 2014, by Taylor King Family Law Solicitors

From 10th December 2014 anyone who has a civil partnership registered in England and Wales will be able to convert their civil partnership into a marriage.

This can be achieved by either having a conversion at the local registry office or local authority office or a conversion by a superintendent registrar at another approved venue, e.g. hotels, stately homes or some religious premises,  accompanied by a ceremony. The civil partners will need proof of ID and proof of the civil partnership.

Both parties must be in attendance at the conversion and, in the presence of each other and the superintendent registrar,  they both must sign a declaration confirming they are in a civil partnership and wish to convert it into a marriage. The registrar will register the conversion on the conversion register and the marriage certificate will be issued.

The cost of the simple conversion will be £45. However for the first year couples who have entered into a civil partnership prior to 29th March 2014 (the date that marriage was available for same sex couples) will be able to covert their civil partnership for free.

Pay child maintenance or risk your credit rating

30 November 2014, by Taylor King Family Law Solicitors

It is proposed, subject to Parliamentary approval, that from March 2015 the Child Maintenance Service and Child Support Agency will begin sharing certain information about the payment records of their clients with credit reference agencies. Separated parents who fail to contribute financially to the upbringing of their children could therefore face damaging their credit rating.

Principally, information will be shared about an individual when a liability order is made against them – a last resort after all other methods of encouraging payments have been exhausted. Between April 2013 and March 2014, 12,410 liability orders were granted.

It is expected that the introduction of this new measure will have a deterrent effect on parents who may otherwise choose to evade maintenance payments.

However, it can also benefit a parent who has a good record of making maintenance payments who can request that information about them be shared with credit reference agencies if they believe it will help improve their credit rating.

The presumption of parental involvement

18 November 2014, by Taylor King Family Law Solicitors

Section 11 of the Child and Families Act 2014 came into force on 22nd October 2014. It provides that when the court makes a child arrangements order there is a presumption (unless the contrary is shown) that the involvement of both parties in the life of their children will be in the best interests of the child. This has been referred to as the presumption of parental involvement. This is important because the presumption recognises that both parents have a significant role to play in the upbringing of their children irrespective of where the child resides or how much time he or she spends with the non resident parent.

However, the presumption does not mean that the court will assume that it is in the child’s best interests to spend equal time with their parents.

English courts are now specifically directed to take into account the presumption of parental involvement when making decisions about where children live and how often they see their parents. “Involvement” is defined as direct or indirect (video calls, email, telephone) but not any particular division of a child’s time.

The welfare of the child is the paramount concern when the court makes a decision about children and this will not be overridden by the presumption of parental involvement.

The presumption is not likely to have much impact on the decisions made by the Family Court who have taken the approach for many years that the best interests of the children are met by both parents having an impact in their lives. This presumption now incorporated in law merely reinforces what is actually taking place.

Post divorce relationships: a fly in the ointment

17 October 2014, by Taylor King Family Law Solicitors

Last month one of the leading family law judges Mr Justice Mostyn in the case of AB v CD stated that when it came to assessing the needs of the parties in financial proceedings within the divorce a new relationship was “a significant fly in the ointment”. The problem arises when one party starts a relationship with  a new partner before finalising financial arrangements following divorce.

In this case the wife had made a financial claim following her divorce. Before the financial proceedings had concluded she had started a relationship with another man, a fact that she had not disclosed. The wife alleged that she did not intend to cohabit with her boyfriend but the Judge found that this was a strong relationship notwithstanding that it had only been going for nine months. The Judge had to consider whether the lump sum whether a lump sum of approximately £250,000 was sufficient to meet the needs of the wife. The financial needs of someone who is cohabiting are likely to be less than those of somebody who is living on their own. For example, a new partner would share the costs of providing a home and the housing costs.

The Judge did take into account the wife’s new relationship and accepted that the lump sum was appropriate for her needs although it might not have been sufficient if she had been single to allow her to relocate to be near friends and family.

The court, in deciding the needs of the parties, has  taken into account whether one or the other is cohabiting. What is unusual in this case is the length of time the wife and her boyfriend had been in their relationship and the expressed intention of the wife that she did not intend to cohabit.

In our experience we have found that district judges often disregard long term relationships in dividing the assets on divorce where evidence of cohabitation is difficult to obtain.