Legal News

French civil partnerships (pacte civil de solidarité or PACS) have enjoyed the same inheritance tax and gift tax rules applicable to married couples since 22 August 2007. But although UK marriages are recognised in France for the purposes of these tax rules, UK civil partnerships have not been. This meant that a partner in a UK civil partnership would be liable to pay tax at 60% in France on any French property he received from his partner by way of lifetime gift or bequest in a Will (subject to a small tax free allowance of €1,570). Married couples and those in a French PACS have been totally exempt since 2007 from inheritance tax on death and have an allowance of €79,533 on lifetime gifts.

Employment Law change Next Year: Unfair Dismissal

From 1st April 2012, the qualifying period for unfair dismissal will be extended from one year to two years. This means that employees will need two years' continuous service in employment to claim unfair dismissal, against their employer. This change was initially announced back in January under the 'resolving workplace disputes consultation' and the Government estimates that this change will reduce the number of tribunal claims by 2000 per year.

There are, however, exceptions to the two year rule and employees need not have two years continuous service in employment in order to make a claim for:

• Dismissals related to asserting a statutory right
• Dismissals in connection with the national minimum wage
• Dismissals connected with refusing to exceed the 48-hour working week
• Dismissals for whistle blowing
• Unlawful Discrimination (including: sex, race, disability, age, sexual orientation, part-time workers
• Health and Safety dismissals
• Pregnancy related dismissals (only if the employer was aware the employee was pregnant)
• Dismissals relating to Trade Union membership or non-membership

Furthermore, as from April 2013, the Government plan to introduce fees for people lodging a tribunal claim but the Government has not yet announced what the fees will be and these will be the subject of a consultation which will start at the end of November.

There is currently no fee for lodging a tribunal claim.

Cohabitation Case: Kernott vs Jones Nov 2011, Law Society Comments:

Supreme Court verdict gives cohabitees more clarity, though urgent reform still is required

Cohabitees who are separating now have greater clarity about how their assets should be shared following a Supreme Court ruling today.

In welcoming the ruling, Law Society President John Wotton said:

“This judgement moves the law forward because it allows courts to reach a view about what the parties intended, and what a fair outcome should look like. However, the meaning of ‘fairness’ in cohabitation law is not the same as fairness in marriage. Today’s verdict only goes so far in providing cohabiting couples with clarity about what will happen to shared property on a relationship breakdown. The fact is that successive governments have failed to legislate on the rights of unmarried couples living together, despite the Law Commission’s proposals for reform, which we have supported.

“Many cases could still end with what most people would consider an unfair outcome. The confused state of the law continues to cause stress, litigation and costs – and hence ultimately is damaging for families and children.

“It is crucial that couples who are thinking of buying a property and living together take legal advice from a solicitor to reduce the likelihood of potential problems later. Solicitors are highly experienced in dealing with house purchases and helping people properly set up their financial arrangements. A solicitor will help to avoid unforeseen problems, about legal rights in a relationship generally, and can discuss how rights might change as a relationship develops, such as children or marriage .

Prenuptial Agreements

A ruling by the Supreme Court in a divorce case means that pre-nuptial agreements will generally be considered binding as long as they are fair and entered into freely. The case involved German heiress Katrin Radmacher and her former husband Nicolas Granatino who is French. The couple married and lived in England so English law applies. When they married they drew up a pre-nup agreement saying that he would not make a claim on her money if they ended up divorcing. However, when they later divorced, Mr Granatino said he would suffer personal hardship if the agreement was upheld. The High Court decided that it would be unfair to hold Mr Granatino to the pre-nup agreement and awarded him £5.8m from Miss Radmacher’s fortune. However, that ruling was then overturned by the Court of Appeal which cut the payment to £1m – a figure Miss Radmacher was prepared to accept. Mr Granatino’s lawyers argued that the Court of Appeal had created a revolutionary piece of legislation instead of applying existing case law. They took the case to the Supreme Court but that too ruled in favour of Ms Radmacher. Lord Phillips, president of the Supreme Court, said: "The court should give effect to such an agreement if it is freely entered into by each party with a full appreciation of its implications, unless in the circumstances prevailing, it would not be fair to hold the parties to their agreement.” He stressed that judges would still have the discretion ignore pre-nups if they were unfair, especially to children, but said that following the ruling it will be natural to infer that parties entering into agreements will “intend that effect be given to them”. “What is important is that each party should have all the information that is material to his or her decision, and that each party should intend that the agreement should govern the financial consequences of the marriage coming to an end.” Lord Phillips added: “The circumstances of the parties at the time of the agreement will be relevant. Those will include such matters as their age and maturity, whether either or both had been married or been in long-term relationships before. What may not be easily foreseeable for less mature couples may well be in contemplation of more mature couples.” It means that if both parties freely enter into a pre-nup that is fair, and both disclose all the relevant financial information in advance, then that agreement will be upheld by the courts. Please contact us if you would like more information about pre-nuptial agreements or any aspect of matrimonial and family law.

Civil Partnerships Recognition in France

Following a change in French law civil partnerships registered in countries outside France are now given recognition in France providing they do not contravene French law.

However in France non-married couples, whether in a PACS or a UK civil partnership, do not have the same rights as married couples in each others estates on death. Under French inheritance law (which will apply to French property owned by a couple even if the couple are not actually French residents) married couples are automatically entitled to a share in their spouse’s estate. A partner in a PACS or a UK civil partnership has no such rights under French law. It is therefore important that a will is made, and when property is purchased, it is done so jointly and there is a survivorship clause inserted in the deed as it can't be added afterwards.