Crowe provided advice to two firms of solicitors as a Witness Expert on the tax implications of transferring assets, or sale of assets and division of proceeds, in divorce proceedings. The advice was delivered in a report format which was Part 25 compliant for court proceedings.
The husband was UK tax resident and the wife; a French tax resident. This case required the collaboration with colleagues in the Crowe Global Network, specifically France, to provide combined UK and French tax advice. The assets included shares in a UK holding company, which owned 100% of both a UK trading company and a UK investment company invested in UK commercial property. Each party held 50% of the issued share capital, requiring detailed analysis of the wife’s UK and French tax position, including application of the UK-France tax treaty and consideration of double tax relief.
Additionally, each party owned a UK residential property and jointly owned a residential property in France. Each property had, at different times, been their primary residence, requiring careful consideration of Private Residence Relief across all three properties.
We worked with our French network firm to deliver coordinated cross-border tax advice within a single Part 25-compliant report, analysing the tax implications of asset transfers and disposals across both jurisdictions, including detailed review of the UK-France tax treaty to determine the wife’s exposure to UK taxation, and the availability of double tax relief.
We also assessed the availability of Private Residence Relief across the UK and French properties, ensuring the correct treatment based on historic usage.
As part of our advice, we identified the most tax-efficient way of dividing the assets. This included recommending that the husband transfer his interest in the French residential property to the wife, reflecting her occupation of the property as her principal residence.
The advice provided a clear, court-compliant and tax-efficient framework for asset division across multiple jurisdictions. The recommended transfer of the French property allowed the parties to proceed with a solution that incurred minimal tax in both the UK and France, while aligning with the wife’s principal residence status and reducing future tax exposure.
This ensured both parties had clarity on their tax obligations and enabled informed decision-making within the divorce proceedings.