An Englishman's Stately Home Is His Divorce Settlement

It has been a matter of debate, since White [2000], as to how inherited wealth should be dealt with on divorce in England. The recent Court of Appeal case of Robson ([2010] EWCA Civ1171), in which almost the entirety of the husband's wealth (£22m) was accumulated before the marriage and inherited from his father, provides an indication of the court's approach. The husband owned a 'magnificent' estate in Oxfordshire on which the family home was situated, a tenancy in respect of the farm estate, an estate in the Scottish Highlands, two London properties, and two parcels of development land. His annual pre-tax income was said to be in the region of £470,000.

The Judge at first instance (Mr Justice Charles) found that the husband had mismanaged the farm estate. The family had lived beyond the level of income that he was generating and the Judge was scathing of his argument that he was the caretaker of the estate for future generations. Contrary to the husband's assertion that the estate was 'dynastic', the Judge found that 'as a couple they were living off the wealth inherited by the husband and in a manner and a level that focused on their enjoyment and sporting passions rather than on preserving the inheritance for the children and future generations'.

The Judge awarded the wife £8m by way of a clean break divorce settlement (which included £5m for property and £3m by way of capitalised income). This figure represented a discount on the amount sought by the wife but nevertheless required the husband to sell the estate. Charles J's main reason for awarding a clean break was that the way the inherited property had been used during the marriage supported the conclusion that its value should be treated as available for distribution.

The husband appealed the order. Before the appeal was heard, the wife bought a property at a total cost of £4.3m, £700,000 less than she had been awarded. The wife's award was reduced on appeal by £1m to £7m on the basis that she had purchased a property for less than the £5m awarded, and because Charles J had assessed her income needs too highly.

The Court of Appeal noted that although the assets were inherited from the husband's family, the parties had jointly elected to live off them and, in effect, use them as a substitute for earned income. Hughes LJ commented 'there can be no possible complaint about an Order which treated the capital in this...