Crowe were engaged by two firms of solicitors to assist with a Private Financial Dispute Resolution process in relation to divorce proceedings.
The engagement included the preparation of a Single Joint Witness Expert (SJE) report relating to the transfer assets, or sale of assets and division of proceeds. The assets included UK, Australian and South African situs assets such as UK residential property, farming partnership interests, UK investments, trust structures (both UK and offshore), and overseas investment companies.
The report needed to advise on the Capital Gains Tax, Income Tax and Stamp Duty Land Tax implications of the transfer of the assets, or sale of the assets and subsequent division of the proceeds. This involved establishing the historic residency and domicile status of each party, as well as considering the availability of Foreign Tax Credit Relief via a review of the Double Tax Agreements with Australia and South Africa. We performed a detailed review of the parties respective Private Residence Relief positions which had an interaction with the farming partnership due to the use of land around the main residence, which was used for farming purposes during the ownership period.
Our advice included recommendations on the most tax efficient options available to the parties which considered their respective tax exposures in the UK and each applicable foreign jurisdiction.
This helped the judge and the respective parties make an informed decision on asset division with a full understanding of the tax liabilities that might arise not only at the point of divorce but also the liabilities that might arise on a future disposal of the assets.