UK – LONDON: PROVENANCE Trends and Developments Contributed by: Beverley Morris, HCR Law
A worked example Rachel and Hugo married in 2018 and are divorcing in 2026. Both are 40, childless, and in highly paid roles. Each has sufficient assets to meet their own future housing needs, and pensions are not a concern as both are part of occupational schemes. Non-matrimonial assets at the time of marriage: • Rachel inherited GBP1.5 million, held in equities and savings in her sole name. • Hugo owned two classic cars worth GBP600,000, gifted by his father and kept solely for his use. These remain non-matrimonial. Matrimonial assets acquired during marriage: • A home purchased for GBP1 million, with equal contributions to both deposit and mortgage. • A holiday barge purchased for GBP90,000, jointly funded and maintained. These are matrimonial and likely to be shared equally. If resolved amicably – a common goal – Rachel might keep the home and buy Hugo out, while Hugo might do the same with the barge. Alternatively, one or both may be sold and proceeds split equally. Problems arising Complications often arise when categorising an asset and determining whether it should be shared. Consider a variation of the Rachel and Hugo scenario: • Hugo owned 100% of the shares in ABC Limited, a private high end shoe company he set up with his father in 2008. • The company produced net profits of GBP300,000 per annum, extracted mostly by dividend. Hugo never worked in the business; his father ran it. • After marriage, Rachel proposed expanding the business to include handbags. With Hugo’s and his father’s consent, she devoted most of her personal time to this project.
Provenance and Divorce: Why Origin Matters This article explores the financial consequences of relationship breakdown. Any reference to divorcing couples should be read to include civil partners. Meaning of provenance The word provenance generally means the place something comes from – its source, origin, or the beginning of its existence. Provenance often provides contextual and circum ‑ stantial evidence for how something was originally created or discovered. It is a term frequently used in the art world and food industry. Why provenance matters in divorce The source of an asset can have profound conse ‑ quences in a divorce. Identifying whether an asset is matrimonial or non- matrimonial has become an essential exercise, as it can significantly affect how assets are divided. Key questions include the following. • Should an asset be shared between the parties? • Should one party retain it entirely? In advising clients, two stages are typically consid ‑ ered. • Wealth: What is the total value of assets under consideration? • Distribution: How should those assets be divided? The categorisation of assets directly informs their dis ‑ tribution. Matrimonial vs non-matrimonial property • Non-matrimonial property – usually pre-marital assets brought into the marriage by one party, or property acquired by gift or inheritance. • Matrimonial property – assets representing the fruits of the marriage – property reflecting the par ‑ ties’ shared endeavour.
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