The seven year itch (or 3.5 for Katie Price)

Thursday, September 03, 2009 | Posted by: Mike Warburton
Categories: Protecting your wealth | Tags: tax planning, survey, divorce, tax relief, marriage, pre-nuptials, Mike Warburton, pre-nups, matrimonial, settlement, Heather Mills, Peter Andre, Jordan, celebrity, Katie Price, Paul McCartney, maintenance

A few months ago I joined Jeremy Vine on his Radio 2 show to discuss the tax problems of the wealthy. Sitting in the green room, I was first joined by veteran rocker Joe Brown , complete with guitar, who was on the programme just before me. Shortly afterwards I was joined by Katie Price, complete with hairdresser, chauffeur and minder. 

Katie Price aka Jordan  was there to join Steve Wright. She told me about her £20,000 teeth veneers, but there was no warning of her separation from Peter Andre, which hit the headlines soon afterwards.

Celebrity divorces are a staple diet for the glossy magazines but there are important financial lessons to keep in mind. 

When Paul McCartney married Heather Mills, for example, he refused to sign a pre-nuptial agreement because he thought it was unromantic. So it may be, but he certainly made life difficult for himself. 

Pre-nups may not be binding but they will certainly be very helpful in any contested divorce. On top of that there are calls for pre-nups to become legally binding in English law. The case involving Susan Sangster and Stuart Crossley is a case in point where the court upheld the pre-nuptial agreement.

Extra-marital affairs are still the main reason for divorce, but this is closely followed by mid-life crises, according to Grant Thornton’s Boom or bust for divorce? annual matrimonial survey of 70 of the UK’s leading family laywers.

And yes, in my opinion, there really is a seven year itch. The period between six and nine years of married life is still a common time for a split to take place.

Even so, it is best to avoid it if at all possible. To divorce these days you either need to very rich and can afford it, or very poor so that you have no assets to worry about.
You won’t get much help from the tax man either. Maintenance payments don’t attract tax relief any more, so more sophisticated tax planning is normally required.

It is a shame about Katie and Peter. I thought they were a good match. Then again it makes for great newspaper headlines.

I remember as I walked out of Broadcasting House that day to face the bank of about 20 photographers waiting for her. Life must get a bit tedious in the spotlight. But I suppose there are some financial compensations.

Image: © Shimelle, 2009

Read Grant Thornton’s 2009 Matrimonial Survey in full – download the PDF.

For tax planning advice on this issue, contact us  to see how we can help.

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