Husbands who pay spousal maintenance to their ex-wives may not know that they could potentially be liable to pay their ex-wife a further lump sum..
But only, if their ex wife asked the court to vary the maintenance and capitalise it.
I've acted for clients who've wanted to capitalise their maintenance payments, but it can only happen in cases where there are enough funds to do so.
The recent appeal case, below, emphasised that the compensation element is still relevant when a spouse applies for a variation. Furthermore, where a Judge assumes an interest rate on a spouse's capital, there can't be an industry standard yet neither can a Judge choose a figure at random.
H v H  EWCA Civ 1523 Application by wife for permission to appeal against a lump sum payment to her of £400,000 to be paid by the husband upon the termination of a joint lives periodical payments order which would occur on his retirement. Permission to appeal granted, appeal allowed and matter remitted to be re-heard. There were two issues at the core of this appeal; firstly, whether Coleridge J, hearing the case at first instance, had erred in applying a calculation of 3.75% net when the appellant (wife) said it should have been 3.75% gross and, secondly, the appropriate application of the principle of 'compensation'.