Foreign Bank Accounts in Divorce Proceedings

Money held outside the UK can make a divorce settlement more difficult to investigate, value and enforce. A spouse may have retained an account in their country of origin, received income through an overseas business, or moved savings abroad shortly before separation. Whatever the reason, the existence of a foreign account does not place the money beyond consideration by the court. Laurus advises clients on complex financial cases with international elements and can help establish what must be disclosed and how overseas funds should be dealt with in a settlement.

Foreign accounts within financial disclosure

A foreign bank account is broadly any account held with a bank or financial institution outside England and Wales. Both spouses are expected to provide full and frank financial disclosure; an obligation not confined to assets situated only in the United Kingdom. Form E requires details of bank, building society and similar accounts, supported by statements, as part of the wider disclosure of property and financial resources. This process therefore encompasses foreign accounts as well as domestic ones.

An account cannot be left out merely because it contains a modest balance, is dormant or is held in a currency other than pounds sterling. The duty is to disclose the account and allow its relevance to be assessed during the process. Laurus has helped many clients identify the appropriate documents and present complicated international finances in a coherent way.

Identifying undisclosed overseas funds

Suspicion alone does not prove that a foreign account exists, but it may justify making proportionate enquiries. Evidence can be found in historic statements, international transfers, foreign tax returns, overseas property transactions, company records, or correspondence referring to interest and investment income. Regular payments to an unidentified institution or unexplained withdrawals shortly before separation may also require further investigation.

The disclosure process permits one spouse to raise focused questions and request missing documents. Where the financial history is complicated, forensic accountants may trace transactions across several accounts and examine whether apparently ordinary payments formed part of a wider movement of capital.

It is important to be aware that direct access to another person’s private banking account is not permitted simply because the parties are married. Documents should be obtained through lawful disclosure and court procedures. Our specialists can assess whether the available evidence supports further enquiries without allowing the case to become dominated by speculation or disproportionate expense.

Transfers and non-disclosure

Money transferred abroad before or after separation remains capable of investigation, and the court may examine the timing, recipient, stated purpose, and subsequent destination of the funds. A genuine payment of tax or repayment of a documented family loan will be treated differently from a transfer to an associate intended to make money unavailable for the settlement.

Under section 37 of the Matrimonial Causes Act 1973, the court has powers relating to transactions intended to defeat a claim for financial relief. Depending upon the evidence and the legal position of any recipient, it may postpone a proposed transaction or set aside a transfer.

Deliberate failure to disclose an overseas account can have serious consequences. The court may draw adverse inferences, order further disclosure, make costs orders, or proceed on the basis that the spouse controls greater resources than admitted. A financial order obtained through non-disclosure may also be vulnerable to being set aside.

Obtaining information across borders

A court can order a spouse within its jurisdiction to produce foreign banking information; however, securing documents directly from an overseas bank is more complicated because the institution will ordinarily be governed by its own country’s privacy, banking secrecy and procedural laws.

The available route may involve obtaining the account holder’s signed authority, using local lawyers, seeking assistance through an overseas court, or relying upon an applicable international mechanism. Some issues include:

• Banks retaining records for different periods or providing statements in unfamiliar formats
• Translation, time differences, local holidays, document certification, and data protection requirements

Laurus is a highly rated law firm with experience of coordinating the legal and practical work required in cases involving overseas assets. We can also advise whether the likely value of the account justifies the cost of pursuing evidence in another jurisdiction.

Ownership structures and joint accounts

A jointly held foreign account is not automatically divided equally, and the court will consider who contributed the money, how the account was operated, if both spouses could withdraw funds, and whether any part was held for another person. If the balance represents family savings, it is likely to form part of the resources available for settlement, even if contributions were unequal.

An account held through a company, trust, or third party requires closer analysis by the court which may examine beneficial ownership, control, withdrawal patterns, and whether the structure is genuine. A properly administered discretionary trust differs from an account held by a relative while one spouse continues to use the money freely. Companies, trustees, or other interested parties may sometimes need to participate in the proceedings to ensure their rights can be determined fairly.

Valuation and treatment in the settlement

Foreign balances are normally converted into pounds so that the parties’ overall positions can be compared. The appropriate valuation date may depend upon the case, particularly where exchange rates fluctuate between disclosure, negotiation, and implementation.

Whether the account was opened before or during the marriage is relevant but not conclusive; premarital savings, for example, may be treated as non-matrimonial in some circumstances, especially where they remained separate, although needs can justify their use. Funds accumulated from income during the marriage are more likely to be treated as matrimonial resources.

Depending on the assets available, rather than ordering a foreign bank to divide an account, it may leave the overseas funds with one spouse and adjust the division of UK property, pensions or savings accordingly.

Protecting funds during proceedings

Where there is credible evidence of an imminent withdrawal or transfer, urgent protective action may be required. Such applications require careful evidence and full disclosure to the court, particularly if made without advance notice. However, enforcement abroad will depend upon local law and may require recognition by a foreign court, so early advice is essential. 

Contact us now to request a free consultation with one of our specialist family solicitors to discuss your divorce and any foreign financial interests you may have.