These are some of the key financial issues which we are currently considering with both Instructing Solicitors and individual lay clients:
1. The Impact of the ‘Credit Crunch’ – Will less be paid?
In May 2009 the Court of Appeal decided that Bryan Myerson was not entitled to set aside the Consent Order made in February 2008 because the value of some of his assets had fallen substantially. In July 2009 the High Court will decide whether or not Mr. Myerson can vary the terms of the Consent Order insofar as they relate to deferred cash payments and a property transfer and, if so, to what extent.
2. Asset Values – What goes down must………….?
Assessing whether the fall in value of an asset is temporary or permanent needs to be considered in the context of ‘the foreseeable future’.
3. High Income Cases – Can there be a ‘clean break’?
On 18 June 2009, the High Court decided that Mrs. McFarlane was entitled to an upward variation in the periodical payments of £250,000 awarded to her and her children just over a year ago by the House of Lords to enable her to save money to provide for herself a ‘clean break’ Duxbury fund.
4. Liquidity – or the lack of it! – Should assets, rather than cash, be transferred?
The general difficulty in raising funds exacerbates the difficulty in achieving ‘clean-break’ settlements. Parties may need to consider transferring assets ‘in specie’. If such assets include shares in unquoted companies, consideration will need to be given to how to police and protect a minority shareholding.
5. Post Nuptial Agreements – Are they an important tax planning tool?
Post the Privy Council’s decision in Mcleod that Post Nuptial Agreements are legally binding, the issue of whether or not to use such agreements when transferring wealth for Inheritance Tax mitigation purposes is relevant.
6. Tax Changes – Will Income be even lower?
The impact of new higher rate of Income Tax – 50 per cent – from 6 April 2010 will need to be taken into account, especially in cases where, owing to the fall in value of the investment returns and pensions, income has already been reduced.
7. Pre Nuptial Agreements – Will they now be regarded as binding?
The Court of Appeal will, no doubt, comment generally on PNA’s when it delivers its decision in Granatino v Radmacher.