How Are Overseas Assets Divided in a Singapore Divorce?

Sep 28

It is increasingly common for married couples in Singapore to own assets outside Singapore.

You or your spouse may own a property in Malaysia, China, Australia or the United Kingdom, maintain foreign bank or investment accounts, hold shares in an overseas company, or have assets acquired while working abroad.

A common question during divorce is:

Can the Singapore Court divide assets located overseas?

The short answer is yes. If an overseas asset falls within the definition of a matrimonial asset, the Singapore Court can generally take it into account when determining the division of matrimonial assets.

The fact that an asset is physically located outside Singapore does not, by itself, exclude it from the matrimonial pool.

What Counts as an Overseas Asset?

Overseas assets can take many forms, including:

residential or investment properties outside Singapore;
foreign bank accounts and fixed deposits;
overseas shares, bonds and investment portfolios;
interests in foreign companies or businesses;
overseas pension or retirement funds;
insurance policies issued overseas;
cryptocurrency held through foreign exchanges or wallets;
foreign trusts or beneficial interests;
vehicles, jewellery, artwork and other valuable property kept overseas; and
assets held through nominees, companies or other structures outside Singapore.

The important question is usually not where the asset is located, but whether it constitutes a matrimonial asset under Singapore law.

Are Overseas Assets Matrimonial Assets?

Section 112 of the Women's Charter 1961 gives the Singapore Court the power to divide matrimonial assets upon divorce.

Broadly speaking, assets acquired by either spouse during the marriage are matrimonial assets regardless of whether they are located in Singapore or overseas.

Certain assets acquired before the marriage may also become matrimonial assets where, for example, they were ordinarily used or enjoyed by the family or were substantially improved during the marriage by the other spouse or both spouses.

On the other hand, gifts and inheritances received by one spouse are generally excluded unless the relevant statutory exceptions apply.

Accordingly, the geographical location of an asset is generally not the decisive issue.

Example

Suppose a Singapore couple owns:

an HDB flat in Singapore worth $800,000;
a condominium in Johor worth $500,000;
an investment property in Australia worth $700,000;
$300,000 in Singapore bank accounts; and
$200,000 in an overseas investment account.

If all of these assets are matrimonial assets, the Court may consider a matrimonial pool worth approximately $2.5 million, rather than looking only at the assets physically situated in Singapore.

Does the Overseas Property Have to Be Sold?

Not necessarily.

Division of matrimonial assets does not always require every asset to be physically divided or sold.

The Court's objective is to arrive at a just and equitable division of the matrimonial pool. Section 112 of the Women's Charter gives the Court broad powers concerning the division or sale of matrimonial assets.

For example, suppose the Court determines that the matrimonial pool should ultimately be divided 60:40.

Instead of ordering an overseas property to be sold, it may be possible for:

Spouse A to retain the overseas property; and
Spouse B to receive a larger proportion of the Singapore assets.

This is sometimes referred to as an asset-for-asset distribution.

Where sufficient Singapore assets exist, this can be considerably more practical than attempting to transfer or sell property situated overseas.

How Does the Court Value an Overseas Property?

The overseas asset must first be properly identified and valued.

For overseas real property, evidence may include:

a valuation report from a qualified local valuer;
recent comparable transactions;
purchase and sale documents;
mortgage statements;
land or property registry searches; and
evidence of the outstanding housing loan.

Generally, what matters for matrimonial asset calculations is the net value of the asset.

For example:

Market value of overseas property: $1,000,000
Outstanding mortgage: $400,000
Approximate net value: $600,000

Where the valuation is expressed in a foreign currency, it may also be necessary to convert the value into Singapore dollars for the purpose of determining the overall matrimonial pool.

The appropriate valuation date and exchange rate can themselves become disputed issues in contested ancillary proceedings.

What If the Overseas Property Is Only in My Spouse's Name?

Sole legal ownership does not necessarily mean that the asset belongs entirely to that spouse for divorce purposes.

An overseas property may be registered solely in the husband's or wife's name and still form part of the matrimonial pool.

This is because legal title and classification as a matrimonial asset are different questions.

If the property was acquired during the marriage, for example, the starting question is whether it falls within the statutory definition of a matrimonial asset — not simply whose name appears on the title deed.

Similarly, the fact that one spouse paid the entire purchase price does not automatically mean that the other spouse has no entitlement to the asset.

The Court considers both direct and indirect contributions when determining a just and equitable division.

What If I Owned the Overseas Property Before Marriage?

This requires closer examination.

An asset acquired before marriage is not automatically included in the matrimonial pool.

However, a pre-marriage asset may fall within the statutory definition of a matrimonial asset if it was ordinarily used or enjoyed by the parties or their children for specified family purposes while the parties were living together, or if it was substantially improved during the marriage by the other spouse or both spouses.

For example, a husband may have purchased a property in Australia before marriage.

If the family subsequently lived in that property as their family home, its treatment in the divorce may be different from an investment property which the husband purchased before marriage, retained solely in his name and which was never used by the family.

The precise facts therefore matter.

What About an Overseas Property Received by Inheritance?

Gifts and inheritances are subject to different rules.

Under section 112(10) of the Women's Charter, an asset acquired by one spouse by gift or inheritance is generally excluded from the matrimonial pool unless it is a matrimonial home or has been substantially improved during the marriage by the other spouse or both spouses.

Accordingly, if a wife inherits an apartment in Hong Kong from her parents and keeps it as a separate investment, the apartment may potentially be excluded.

The outcome may be different if the inherited property subsequently becomes the parties' matrimonial home or is substantially improved during the marriage in circumstances falling within section 112.

Do I Have to Disclose My Overseas Assets?

Yes.

The obligation to provide full and frank financial disclosure in divorce proceedings is not confined to Singapore assets.

A spouse cannot simply omit an asset because it is located outside Singapore.

Depending on the nature of the asset, relevant documents may include:

foreign bank statements;
property title documents;
mortgage statements;
valuation reports;
foreign brokerage statements;
company searches;
corporate financial statements;
tax documents;
insurance statements; and
documents showing the acquisition and funding of the asset.

If you have overseas assets, it is important to tell your divorce lawyer about them from the outset.

What If My Spouse Is Hiding Assets Overseas?

This is often one of the more difficult issues in high-asset divorces.

A spouse may suspect that the other party has:

undisclosed foreign bank accounts;
transferred money to relatives overseas;
purchased property in another person's name;
transferred shares to an overseas company;
moved money into cryptocurrency;
understated the value of a foreign business; or
deliberately failed to disclose an overseas property.

The fact that the asset is overseas does not remove the spouse's disclosure obligations.

Where there are legitimate gaps or inconsistencies in the financial disclosure, it may be possible to seek further information and documents through the Court process.

Depending on the circumstances, this may involve requests for further disclosure, interrogatories or other appropriate applications.

Where a party fails to provide full and frank disclosure, the Court may also consider whether an adverse inference should be drawn against that party.

An adverse inference can have significant consequences for the eventual division of the matrimonial assets.

Can the Singapore Court Order the Transfer of a Foreign Property?

This is where overseas assets can become more complicated.

There is an important distinction between:

the Singapore Court taking the value of an overseas asset into account when dividing the matrimonial pool; and
implementing an order that affects legal title to property situated in another country.

The Singapore Court has broad powers under section 112 concerning matrimonial assets.

However, an overseas property is also subject to the laws and land-registration system of the country where it is situated.

For example, a Singapore divorce order may require a spouse to take steps to transfer or sell an overseas property. Whether the Singapore order can be directly registered or enforced overseas will depend on the law of that foreign jurisdiction.

Foreign legal advice may therefore be required.

This is one reason why, where possible, parties may prefer to structure the division using assets located in Singapore rather than requiring a complicated transfer of foreign property.

What If My Spouse Refuses to Cooperate?

Suppose the Court orders that an overseas property is to be sold or transferred, but the registered owner subsequently refuses to sign the necessary documents.

Enforcement can be more complicated than where the asset is situated in Singapore.

The available options will depend on:

the precise terms of the Singapore Court order;
the country where the asset is located;
whether the Singapore order is recognised there;
the foreign jurisdiction's enforcement procedures; and
whether further proceedings are required overseas.

This is why the practical enforceability of the proposed asset division should be considered before the final orders are made, rather than only after a spouse refuses to comply.

Can the Court Simply Give Me More Singapore Assets Instead?

Potentially, yes.

This can sometimes be the cleaner solution.

Instead of selling every asset and dividing every dollar equally, the parties may structure the division so that one spouse retains certain assets while the other receives assets of equivalent value.

The precise mechanics will depend on the ownership of the assets, liabilities, tax implications and whether the proposed arrangement is practically workable.

Are Foreign Businesses Included?

They can be.

If a spouse owns shares in a company or business outside Singapore and that interest constitutes a matrimonial asset, its value may be included in the matrimonial pool.

The more difficult issue is often valuation.

A business may own substantial assets but have significant liabilities. A spouse may also own only part of the company.

A proper valuation may therefore need to consider matters such as:

the spouse's percentage shareholding;
company assets and liabilities;
revenue and profitability;
shareholder loans;
dividends;
related-party transactions;
goodwill; and
the appropriate valuation methodology.

In higher-value cases, an independent expert valuation may be necessary.

What About Overseas Bank Accounts and Investments?

Foreign bank accounts and investment portfolios are generally treated in the same conceptual way as equivalent Singapore assets.

If they are matrimonial assets, their value can be included in the matrimonial pool.

The principal difficulties tend to concern disclosure, tracing and valuation, rather than geography.

For example, if substantial sums were transferred from a disclosed Singapore bank account to an unidentified overseas account shortly before divorce proceedings commenced, further explanation and supporting documentation may be required.

Does Having Most of the Assets Overseas Mean the Divorce Should Be Heard Overseas?

Not necessarily.

The location of the matrimonial assets is only one consideration when determining the appropriate jurisdiction for an international divorce.

Singapore Courts are capable of dealing with matrimonial assets located overseas.

Accordingly, the mere fact that a substantial proportion of the matrimonial pool is located in another country does not automatically mean that Singapore is an inappropriate forum.

However, where virtually the entire matrimonial estate, the parties, the children and the relevant evidence are situated overseas, jurisdiction and forum non conveniens issues may require separate consideration.

What If I Was Already Divorced Overseas?

A different regime may potentially apply where the divorce itself was obtained outside Singapore and a former spouse subsequently seeks financial relief in Singapore.

Chapter 4A of the Women's Charter 1961 contains provisions dealing with applications for financial relief following certain overseas matrimonial proceedings, including requirements concerning jurisdiction, permission of the Court and whether Singapore is an appropriate forum.

This is different from an ordinary Singapore divorce in which the Singapore Court is determining the matrimonial assets under section 112.

Legal advice should therefore be obtained if you already have a foreign divorce order but there are assets or financial issues in Singapore which remain unresolved.

Overseas Assets Can Make Divorce More Complex — But They Are Not Beyond the Singapore Court's Reach

Having assets overseas does not mean that those assets are automatically excluded from a Singapore divorce.

The key questions are usually:

Is the overseas asset a matrimonial asset? What is its proper value? Has it been fully disclosed? And how can the eventual division be implemented and enforced in practice?

Where significant foreign assets are involved, these questions should be considered early. This is particularly important for overseas properties, businesses, trusts and investment structures where valuation, foreign law and enforcement issues may arise.

At 21 Chambers LLC, we advise on the division of matrimonial assets in Singapore divorce proceedings, including matters involving overseas properties, foreign bank and investment accounts, business interests and disputes over undisclosed assets.

Contact us to arrange a consultation if your divorce involves assets in Singapore and overseas.

This article provides general information on Singapore family law and does not constitute legal advice.

Yiyang Chen