BN66 - Court of Appeal and beyond

[ASB]

make sure you put all the HMRC notices down as liabilities.

Can be a bugger to get the debts counted as matrimonial property though. Especially contingent ones.

It would, in my view, be wise to discuss it with the solicitors. If the debts are going to be considered personally then it might be worth considering accepting them and settling. e.g.

Joint assets 250,000
Tax Debt 50,000

If the debt is considered matrimonial then a 50/50 settlement would be 150,000 to the party with the debt (to allow it to be repaid) and then 100,000 to the other.

If the debt is not considered matrimonial then it's 125,000 each, but if the debt comes to fruition then this means one part gets 75,000 the other 125,000.

I'm guessing marcusss is the male so a 50/50 split is unlikely.

A better place to ask the question might be Free Divorce Advice | Solicitor Divorce only £179

[centurian]

So the earnings have to be split - but if HMRC win, then the tax on the earnings becomes a personal debt which can't be split

Talk about getting screwed several ways. This wasn't a debt run up at the local bookies.

If HMRC win, then surely it retrospectively reduces the net earnings that were actually made in the first place.

I suppose if you still have the cash in a joint account, then it's easier to argue that part of that cash was never yours to begin with (if HMRC win). If that cash has been invested in property, I guess that's where it gets more complicated.

[marcuss]

Looking at the answers/discussion it seems complicated...

Sols are dumbfounded! They are going to reply on the 'learned judge' (and the other side) who wants to know more.. how much in then out over last 10 yrs which,naturally, I dont have each transactions history.

Funny thing is that I joined the scheme then separated a yr later (carried on for next 4yrs in the scheme). But now they have eye on the whole cake.

I was wondering if anyone had been in the similar situation (where court asks to know about the scheme - what trust etc - and wants to know ALL about the money) to give me some advance advise.

[DonkeyRhubarb]

Montpelier have helped a few people going through divorce, so it's definitely worth asking them.

I am pretty sure that the divorce courts have accepted Closure Notices as a potential debt and took these into account in the settlement.

People who got divorced prior to BN66 were not so fortunate. Assets were divided with no inkling of what was to come. This is yet another paradox of retrospective legislation. As far as I know, there is no way to renegotiate a divorce settlement once it has been agreed.

[ASB]

Montpelier have helped a few people going through divorce, so it's definitely worth asking them.

I am pretty sure that the divorce courts have accepted Closure Notices as a potential debt and took these into account in the settlement.

People who got divorced prior to BN66 were not so fortunate. Assets were divided with no inkling of what was to come. This is yet another paradox of retrospective legislation. As far as I know, there is no way to renegotiate a divorce settlement once it has been agreed.

Maintenance going forward is usually possible to renegotiate.

Financial settlement that has not been made is possible to renegotiate (but hard to win) e.g.

City tycoon hit by credit crunch fails to renegotiate divorce settlement | Business | guardian.co.uk

Financial settlement that has been made is theoretically possible to renegotiate - but extremely difficult in practice. General principle is that all possible eventualities should be considered and risked in making the settlement by consent order. The same is true if it goes to final hearing, except it is even harder to be successful, really need to show the judge erred in law.

In practice though so far I think the judicial answer has always been "no".

Can divorce settlements be renegotiated in light of the credit crunch?

[ASB]

If HMRC win, then surely it retrospectively reduces the net earnings that were actually made in the first place.

Yes, but doesn't make any difference to the financial settlement. That's based on a line in the sand on the day in question.

I suppose if you still have the cash in a joint account, then it's easier to argue that part of that cash was never yours to begin with (if HMRC win). If that cash has been invested in property, I guess that's where it gets more complicated.

Doesn't matter where it has been invested. Either it's marital property or it isn't.

If it's marital property (in this context property means anything of value rather than bricks and mortar) then it is in the pot for splitting starting from a 50/50 split and adjusting according to circumstance (white v white).

It is is not marital property then it remains with the owner and is not part of the pot.

The same applies to liabilities.

[bve534]

retrospective legislation and divorce

Montpelier have helped a few people going through divorce, so it's definitely worth asking them.

I am pretty sure that the divorce courts have accepted Closure Notices as a potential debt and took these into account in the settlement.

People who got divorced prior to BN66 were not so fortunate. Assets were divided with no inkling of what was to come. This is yet another paradox of retrospective legislation. As far as I know, there is no way to renegotiate a divorce settlement once it has been agreed.

DR - you raise an interesting point about divorce settlement and does this give us another legal route to attack this unlawful legislation. It may already have been discussed in the court cases. If it wasnt discussed then could it be a cornerstone of our case? Given the stress the whole issue has put so many families under it may be considered the root cause of the divorces that are discussed on the blog. It means that people who divorced prior to BN66 will be punished twice and those who had sufficient assets to settle their tax bill can no longer settle because they have lost a percentage of those assets in the divorce settlement. They are then punished 3 times - divorce settlement, BN66 and interest and because they can no longer pay they suffer forcible seizure of their estate. Bloody hell whats that about!!

[PlaneSailing]

DR - you raise an interesting point about divorce settlement and does this give us another legal route to attack this unlawful legislation. It may already have been discussed in the court cases. If it wasnt discussed then could it be a cornerstone of our case? Given the stress the whole issue has put so many families under it may be considered the root cause of the divorces that are discussed on the blog. It means that people who divorced prior to BN66 will be punished twice and those who had sufficient assets to settle their tax bill can no longer settle because they have lost a percentage of those assets in the divorce settlement. They are then punished 3 times - divorce settlement, BN66 and interest and because they can no longer pay they suffer forcible seizure of their estate. Bloody hell whats that about!!

Almost fits my case. I'd happily pass some of this to my ex.

[DonkeyRhubarb]

If you think the divorce scenario is bad, there's worse.

I heard of a chap in the scheme who died a couple of years before BN66.

His estate was distributed to his beneficiaries. I think they even had to pay inheritance tax.

If we lose, HMRC will be chasing the beneficiaries for the debt.

The poor guy has been dead 5 years but interest is still accruing.

[bve534]

Fight back

If you think the divorce scenario is bad, there's worse.

I heard of a chap in the scheme who died a couple of years before BN66.

His estate was distributed to his beneficiaries. I think they even had to pay inheritance tax.

If we lose, HMRC will be chasing the beneficiaries for the debt.

The poor guy has been dead 5 years but interest is still accruing.

DR - I would suggest the death and divorce exampls would give us ample grounds for a much stronger case