24 Jan How Australian Law Deals with Assets that are Outside Australia
It is an open fact that globalisation has resulted in countries becoming closer than ever before. Technology has also made international trade easy and it’s becoming more common to find people owning foreign assets and investments.
A common concern for people who own assets overseas or who have potential interest in foreign assets as a result of their marriage to a foreign national is whether the Court considers assets located overseas as property in divorce proceedings.
The Family Law Act (1975), defines property as;
- in relation to the parties to a marriage or either of them–means property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion; or
- in relation to the parties to a de facto relationship or either of them–means property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion.
This is a wide-ranging description that can comprise nearly anything of value.
Section 31 (2) of the Family Law Act (1975) gives the Courts power to make orders touching on international assets. The section states “[…] may be exercised in relation to persons or things outside Australia and the territories”.
Foreign assets may include money held in international accounts, overseas property, overseas pensions, and international shareholdings.
In any legal proceedings that either involves property or where parties have settled on a property settlement, its procedure that the Courts take into consideration any assets that are overseas or that are located outside Australia.
If either party in the proceedings has assets or resources overseas, they must disclose such information to the other party.
When making decisions, the Courts can make Orders that take into account the assets that are overseas including their value, or the Court can make Orders that are binding to a party in the proceedings with directions that they deal with the overseas assets in a specific way.
There are various issues that arise regarding overseas assets before the Court and this include:
- In case the parties to the suit cannot settle on the value of an asset that is overseas, the Court can seek to obtain a valuation from an expert.
- Taxation of the overseas assets both in Australia and the country or territory where the assets are located. The Court advises that the parties involved in the suit obtain advice on the tax implications of the property being used as settlement or being incorporated into the Orders.
- Any issue(s) that will emerge as a result of implementation and execution of property Orders that touch on overseas assets. In some instances, for example, it may require cooperation from a third party or seeking Orders from the appropriate authorities in the overseas jurisdiction. For example, to implement a superannuation splitting or pension sharing Order(s) made in Australia, it may require that enquiries are made to the Trustee of an overseas pension fund or superannuation.
- Depending on the number of assets that a party has overseas and where each party is domiciled, it may necessitate that each party’s matter be held and determined by the laws of that country. It is therefore prudent in such a scenario to seek legal advice.
At Adam Jones Solicitors, we have assisted clients who have proceedings before the Court that touch on their properties located overseas. We have in-depth experience in matters that involve overseas assets, specifically, trusts, pensions, super funds, and companies. We work alongside other international law firms and experts in this field to ensure the smooth sailing of our client’s matters. In case you need any further advice, feel free to contact us.