On divorce, a financial order is usually made dealing with the splitting of matrimonial assets. Before this can happen, both parties need to make full financial disclosure to each other and to the court. We take a look at what happens if one party tries to hide assets.
If you are going through a divorce, you will need to come to an arrangement over the separation of your finances. This can either be done by agreement between you, in which case the court can be asked to approve a consent order, or by order of the court following a hearing or arbitration. In all instances, you will need to fill in Form E, which sets out details of all of your assets.
What if attempts are made to hide assets?
It is sometimes the case that individuals going through a divorce attempt to hide or move assets. This could be by:
- Opening a new bank account
- Giving money to a family member or friend to hold
- Deliberately undervaluing business and other assets
- Manipulating money held in a business
- Deferring bonuses
- Falsely claiming to owe money, for example, to a business investor
- Creating false invoices or false debts
- Hiding money in offshore or overseas holdings
- Concealing money by transferring it to cryptocurrency
The courts have the power to impose penalties if they believe that assets have been hidden. This includes:
- Setting aside an order at a future date and making a new order taking into account the amount of money believed to have been hidden
- Ordering the guilty party to pay the other side’s legal costs
- Reducing the amount of assets the guilty party receives
- A conviction for contempt of court
- In the most serious cases, imprisonment
Can hidden assets be discovered?
If you believe that assets are being hidden, there are several options open to your solicitor. These include:
Asking the court to make a non-party disclosure order – this is an order requiring third parties such as banks and HM Revenue & Customs to disclose information.
Asking the court for a search and seizure order – this is useful if you believe that your spouse may try to move or destroy records and documents to hide evidence of their assets.
Asking the court for a freezing order – this is an injunction to prevent assets from being moved or disposed of. The bank or other institution holding the funds would not then allow money to be transferred or withdrawn.
Asking the court for an avoidance of disposition order – this can stop a third party from disposing of assets passed to them by the guilty party and require the asset to be returned so that it can be dealt with in the settlement.
Ask the court to ‘add back’ the value of assets that have been disposed of – this is a request to take into account the value of assets that are no longer held by the guilty party when making an order dividing assets. For example, if £100,000 has been disposed of, the court can add this sum back into the calculation and the innocent party would be entitled to receive a share of this, to be paid from available assets.
How we can help
If you believe that your spouse is hiding assets, you are strongly advised to speak to a solicitor as soon as possible. The quicker action can be taken, the harder it is likely to be for the other party to get away with hiding or moving assets.
Elizabeth Foster is a Family Law Executive at Wollens and can advise you. Contact Elizabeth on [email protected] or call 01803 225119
Elizabeth Foster – Family Law Executive
You can also complete an online enquiry form. One of the Wollens team will contact you as soon as they are available.
