Relationship property agreements
Question from Patricia updated on 11th March 2019:
I own land that I intend to develop and have recently married. The property is in my name but matrimonial funds are used to maintain the property. There is no prenuptial agreement so if the relationship fails my spouse receives 50% of the property. Can I split the profits from the property 50/50 with my spouse?
Our expert Mark Withers responded:
Case law on this question suggests IRD will consider three factors, who holds title to the property, who is liable for any debt associated with it and whether contributions are made from matrimonial property. If you accept that the property is in effect jointly owned you could enter a relationship property agreement to equalise the ownership, that would place the matter beyond any doubt. Income and expenditure associated with the property should also be transacted through a joint account if you intend splitting the income.
Mark Withers and his team at Withers Tsang & Co specialise in advising on property related transactions, valuation and restructure services and tax planning.