Divorce Asset Transfers Can Be Reversed

Serena Sandhu

Transferring assets to deliberately avoid financial claims will be reversed

The financial remedies team at Osbornes Law represents clients in complex and acrimonious high value financial cases.

We understand how tempting it can be for a party on separation and divorce to move assets out of reach to minimise what they may pay a former partner. But if you do, you face the prospect of it being reversed by the courts.

In a recent very high value case involving an unmarried couple with a son, the father divested himself of his assets partly to deprive the child and the mother of financial support. Unsurprisingly, the court did not look too favourably on his actions.

Transfers to defeat a claim

A divorcing party can ask the court, under s37 of the Matrimonial Causes Act 1973, to set aside a transaction made by the other spouse if it was done with intent to defeat a financial claim.

In other cases, for example, separated couples who were never married, a party can make a similar claim under s423 Insolvency Act 1986 (‘transactions defrauding creditors’). It allows the victim of the transaction to claim a share of the assets involved.

What happened?

In Re P (A Child) [2025] EWHC 1460 (Fam), the parties were both Czech nationals and had a 7-year-old son. They were in a relationship from 2015 until 2022. When they separated, the very wealthy father cut his monthly financial support from £2,500 to just £400, claiming to have almost nothing.

The mother had no significant capital of her own and took home less than £3,300 per month in salary and benefits. She applied for child maintenance under the Children Act 1989; and brought a s.423 application to have various transactions made by the father set aside.

The mother argued that the father had assets worth tens of millions of pounds from the sale of his company; and that he had transferred the funds into a family trust to put them out of reach.

The judge concluded that the company sale had actually netted the father some €73 million and that €16.7 million of this had been paid personally to him. While he did not dispute this payment, he said he had entirely spent it in, e.g. repaying of debts and refurbishing a property in his homeland.

Untruthful

The judge rejected the father’s claims, finding that he had been untruthful and failed to provide full and frank disclosure. He had even refused to disclose the exact amounts paid to his company – a refusal the judge said was borne out of “a desire to conceal this information from the mother and the court”.

He concluded that the father had resources in the tens of millions of pounds; and that these remained largely accessible to him and were sufficiently liquid to enable him to easily meet the mother’s financial claims.

As for the trust, this was found to be principally designed for the father’s benefit and was not a legitimate financial vehicle. It was an “illusion” that it was a family trust. Rather, it was set up “as a vehicle to hold wealth… substantially created by the father”. Furthermore, several of the transfers and dispositions were made with minimal or zero consideration in order to defeat the claims of creditors – including the mother.

Notably, the father was already subject to a freezing order (which was to continue) in respect of several assets including a London property. After the freezing order was made, it emerged that he had already transferred his interest in that property to his father – something else he had not disclosed to the court.

Although this meant the judge could make s423 orders setting aside the transactions, but he chose not to at this stage.

What he did do, was to order a £960,000 housing fund for the mother; a £29,250 lump sum for the child’s further capital needs; and an additional £173,500 sum to cover the mother’s liabilities. He was also ordered to pay monthly child maintenance of £5,000 (plus school fees) until their son completes tertiary education.

Later on, the court will consider the mother’s claims for funding in respect of her legal costs – and the father’s compliance with the court orders made. The transfers made to defeat financial claims could yet be overturned.

How can we help?

At Osbornes Law, we bring clarity and strength to complex financial disputes, ensuring justice prevails even when assets are hidden or misrepresented. Our financial remedies team has the expertise and tenacity to challenge unfair transfers and secure rightful outcomes for our clients. If you have any concerns about your ex transferring assets to prevent you making a claim, it is important to contact us urgently for specialist advice. We can also advise you on the possibility of ensuring a wealthy former spouse or partner can contribute towards your legal costs. Please contact us by:

• Filling in our online enquiry form; or
• Calling us on 020 7485 8811