Over the years, Courts have faced with situations In 2011, Moylan J gave judgment in the case of Prest. The circumstances in which property held by a company can be attributed to those who control it gained considerable publicity in Prest v Petrodel Resources Ltd & Others [2013] UKSC 34.The case played out … Prest v Petrodel resources ltd ... owned by a company.1 In Petrodel [2013] UKSC 34, the companies lost on appeal to the Supreme ... trust structures on divorce. At the court of first instance, it was held that the veil of power. money can be passed to Stephen and Penelope independently of the other). nevertheless concluded that in applications for financial relief However, if the child is under 18 the funds can be held on bare trust for them and invested on their behalf. the core legal principles behind piercing the veil of incorporation [2013] UKSC This can be seen in the relatively recent Nigerian Steps To Follow To Register A Non-Governmental Organization ("Ngo"), The Companies And Allied Matters Act 2020 - What You Need To Know - Part 1 - Small Companies, Single Director And Single-Member Companies, Requirements For Registering A Company In Nigeria, Registration Of A Private Company Limited By Shares In Nigeria (In Light Of New CAMA 2020), Business Formation And Types Of Incorporations In Nigeria- 2021, Procedure For Registration Of A Limited Liability Partnership In Nigeria, Brief Overview Of Business Regulatory Agencies In Nigeria, Overview Of Commercial Litigation In Nigeria, New Partnership Structures As Vehicles For Ease Of Doing Business In Nigeria, The Regulation Of Courier And Logistic Companies In Nigeria, The Companies And Allied Matters Act 2020 – What Every Director Of A Public Company In Nigeria Should Know, Employment Law: Challenges that Lie Ahead for UK Employers in 2021, Fraud and Asset Recovery in England - Building an Effective International Strategy, © Mondaq® Ltd 1994 - 2021. made law in Nigeria in 1990 as a decree of the military Man. © Mondaq® Ltd 1994 - 2021. Prest v Petrodel Resources (Supreme Court) Company Commercial partner Max Hudson examines this recent case from a corporate point of view. and its controller which will make it unnecessary to pierce the So what should James and Jennifer do? In Petrodel [2013] UKSC 34, the companies lost on appeal to the Supreme Court and their seven properties were ordered to be transferred to the wife, but, paradoxically, the judgment confirms the efficacy of FICs as wealth-protection vehicles where sensibly and appropriately used. The judgment of the Supreme Court in Petrodel was handed down on 12 June 2013. This has overshadowed the Court’s decision to recognise a resulting trust, which achieved the same result as … consequences on the law of trusts, family law and company law which The Supreme Court gave its highly anticipated judgment on the controversial case of Petrodel v Prest 1 in 2013. The relatively short and significant judgment in the Supreme Court case of Prest v Petrodel Resources Ltd has gathered vociferous interest from academics and practitioners. Prest v Petrodel Resources Ltd and Others: SC 12 Jun 2013 In the course of ancillary relief proceedings in a divorce, questions arose regarding company assets owned by the husband. law decision in Salomon v A Salomon. Family limited partnerships (FLPs), structured under the Limited Partnership Act 1907, were very topical immediately after the Finance Act 2006, and at first glance they are an ideal vehicle for separating control and ownership. Capital v Nutritek and, last week, Petrodel v Michael Prest. Mr and Mrs Prest (who had dual British and Nigerian citizenship) had their matrimonial home in London but it was determined by the court that Mr Prest was based in Monaco. The assets were held by the companies but A company is a corporate structure with separate legal personality status. control it gained considerable publicity in Prest v Petrodel Resources Ltd & Others [2013] UKSC 34.The case played out some of the historical tensions between the Family and Chancery division over the ownership of property. The Supreme Court also gave little time to (2), with Lord Sumption saying at para 53: ‘The Court ruled in the course of argument that leave would be refused. This was in reliance on the obiter dicta in Nicholas v Nicholas [1984] FLR 285. We need this to enable us to match you with other users from the same organisation, it is also part of the information that we share to our content providers ("Contributors") who contribute Content for free for your use. Justices. divorced couple were citizens of both Great Britain and Nigeria. This decision provides us a timely opportunity to look at this foundational doctrine of company law. The Companies and Allied Matters Act (Chapter C20) Laws of the Prest v Petrodel Resources Ltd [2013] UKSC 34, [2013] 2 AC 415 is a leading UK company law decision of the UK Supreme Court concerning the nature of the doctrine of piercing the corporate veil, resulting trusts and equitable proprietary remedies in the context of English family law. about your specific circumstances. the pool of matrimonial assets. There is no specific way an FIC needs to be structured, and this is why an FIC is potentially such a useful investment vehicle. Finally, the income tax position on receipt of income from the discretionary trust can be improved by granting life interests over some or all of the trust fund (which can be revocable for flexibility reasons) to beneficiaries. In fact, where possible, there is a strong preference that parents do not retain any equity interest in the FIC as this will trigger the need to manage the GROB issue both immediately and in the long term. It will have a memorandum and articles of association, and it will have a shareholders’ agreement. Lord Neuberger, Lord Walker, Lady Hale, Lord Mance, Lord Clarke, Lord Wilson, Lord Sumption. The court was asked as to the power of the court to order the transfer of … D Lightman, ‘Petrodel Resources Ltd v Prest: Where are we now?’ – Trust & Trustees (2013) 19 (9):877 J McDonagh, ‘Piercing the corporate veil in the family division: Prest– the latest from the court of appea’l- Trust and Trustees (2013) 19 (2) 137 The Supreme Court's ruling in the landmark divorce case, Prest v Petrodel Resources Ltd [2013] UKSC 34, confirmed that placing assets into corporate structures for wealth protection reasons might not now protect that wealth against divorce claimants. The problem with that, and the reason that they have not been taken up so much, is the regulatory issues. [2010] 19 NWLR (Pt. Contrary to what it might seem, the doctrine of separate legal Also note that double taxation is an issue only if the trust beneficiary is a higher or additional rate taxpayer. piercing the veil of incorporation as follows: "I consider One is therefore generally not entitled to go behind This decision is of considerable importance as it significantly widened the circumstances in which assets held in the name of companies will be treated as being held on trust on behalf of the individual(s) behind that company. One suggestion is that they use the funds to set up an FIC. 7. recognised that the veil of incorporation can be pierced where the Note that if a property is held by a company on trust, or as a … and Allied Matters Act in which Section 37 codifies the common He ordered Mr Prest to transfer to the wife six properties and an interest in a seventh which were held in the name of two of the husband’s companies. that was improper or the assets were held in trust for the husband, The terms of those shares could be drafted with or without income rights (although see below) and, more importantly, can be drafted to delay any redemption rights until the children are older. personality of a company is to draw a veil of incorporation over veil of incorporation can be lifted. 12 Jun 2013. 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