The penalty for hiding assets in the UK during a divorce may include an unfavourable divorce settlement, fines and, in some cases, imprisonment. An ‘unfavourable divorce settlement’ means that a spouse who deliberately hides assets to gain an unfair advantage for themselves may ultimately get a smaller share of the marital assets than the other party. It is not uncommon for divorcing spouses to attempt to hide their assets as a way of keeping a larger share of their assets or keeping certain assets for themselves. As we will discuss in this article, any attempt to hide financial assets in the UK during divorce is taken extremely seriously by the courts.
Financial disclosure in a divorce
One of the most important steps in the process of reaching a financial agreement for a divorce settlement in the UK is financial disclosure, which involves the completion of Form E (Financial Statement)1. Form E is a legal disclosure document which must be completed when applying for a financial order under the Matrimonial Causes Act 1973 and Civil Partnership Act 2004. It is essential that anyone completing Form E does so truthfully by providing a ‘full and frank’ disclosure of all their assets. Form E sets out all the financial assets (e.g. properties, possessions, income, pensions, shares, investments, savings, and business interests) held by each party to the divorce and includes a signed statement of truth. If any person is found to have lied on Form E, they may face court legal proceedings, which may lead to imprisonment.
Common ways to hide money in a divorce
It is important to understand that while it may be tempting for some people to hide assets in a divorce in the UK, there is no ‘best way’ to hide your assets from your spouse. Some of the most common ways that individuals try to hide assets in a divorce include:
- Not mentioning certain assets or interests on Form E
- Transferring assets to another person or legal jurisdiction for a temporary period
- Setting up a trust into which assets are transferred
- Giving money away to family or friends
- Placing money into bank accounts or director’s loan accounts which are not disclosed
- Undervaluing their assets
- Creating fake invoices for bills and liabilities which are not true
- Stating that certain assets do not belong to them when they do, and
- Buying cryptocurrency
Any attempt to hide assets, even if the person making the disclosure believes it to be minor, will be heavily frowned upon by the courts and will almost certainly result in serious penalties and a less favourable divorce settlement.
How hidden assets in divorce are discovered
Hidden assets are often discovered during the divorce process by experienced family lawyers who work alongside forensic accounting to investigate the disclosure of assets.
If you are concerned that your spouse may be attempting to hide some of their assets, speak to our family law solicitors, who will recommend the best course of action, and if necessary, engage a specialist forensic accountant who can investigate this for you.
How to deal with a wife or husband hiding assets during divorce in the UK
If you suspect your spouse may be hiding assets during your divorce, there are several actions that can be taken, including applying for a:
- Freezing Order
- ‘Add Back’ Order
- Avoidance of Disposition Order
- Third-Party Disclosure Order
- Search and Seizure Order
There are several highly effective ways that we can help you force your spouse to disclose their assets properly, ensuring that you receive a fair financial settlement following your divorce. It is vital that you never launch your own investigation into any non-disclosure (e.g. accessing your partner’s bank account or reading their emails or correspondence) as you may face civil and criminal penalties by doing so. Before taking any action, including applying any of the above court orders, it is important to seek legal advice from an experienced family law solicitor who will prepare your case thoroughly.
Alternatively, if you discover or suspect that assets have been hidden once your divorce settlement is finalised, there may still be ways that your case can be reopened, leading to a fairer settlement. Again, speak to a family law lawyer if you believe this may be the case.
References
1 GOV.UK: Form E for financial disclosure
