Does Prest v Petrodel allow piercing the corporate veil?

No. The UK Supreme Court refused to pierce the veil. Instead, it found the companies held properties on trust for Mr Prest.

So how could the wife reach the assets?

Through trust principles. The properties were beneficially owned by Mr Prest, so they could be included in the divorce settlement.

What is the rule on veil piercing after this case?

Veil piercing is a rare, last-resort exception to Salomon. Use it only for true evasion or concealment where no other legal route works.

Did the Court rely on the Matrimonial Causes Act to pierce the veil?

No. The Court said family courts should not use MCA powers to pierce the veil where company and trust law already give answers.

Why is Prest v Petrodel important for students?

It draws a clean line: prefer trust and property analysis; use veil piercing only in exceptional abuse cases.

Prest v Petrodel Resources Ltd & Others [2013] UKSC 34

UK Supreme Court theme with company and family law icons

Quick Summary

The case is about money and property in a divorce. Mrs Prest said her husband used companies to hide assets. She wanted the court to treat those company properties as his.

The UK Supreme Court did not pierce the corporate veil. Instead, it said the properties were held on trust for Mr Prest. So the assets could be used to meet the divorce order.

Issues

Can the court reach company-held assets in a divorce without breaking the Salomon principle?
When, if ever, may a court pierce the corporate veil?

Rules

Veil piercing is exceptional: Only for true abuse—evasion or concealment—where no other legal route works.
Prefer property/trust analysis: If the company holds on trust for the individual, courts may order transfer without piercing.
Salomon stands strong: Ownership and control do not, by themselves, make company assets personal assets.

Facts (Timeline)

Timeline of Prest v Petrodel from family court to UK Supreme Court

Mr and Mrs Prest were wealthy. Many properties stood in companies that Mr Prest owned and controlled.

Family court: said it could reach company assets under the Matrimonial Causes Act (MCA) s.24(1)(a).

Court of Appeal: disagreed—criticised using MCA to pierce the veil; said no veil piercing without abuse.

UK Supreme Court: allowed Mrs Prest’s appeal, but not by veil piercing—by finding trust ownership.

Arguments

Appellant (Mrs Prest)

Companies were a front for Mr Prest’s assets.
Properties should count for ancillary relief.
If needed, court should pierce the veil.

Respondents (Companies & Mr Prest)

Salomon protects separate personality.
Assets are company assets, not personal.
No abuse shown; veil piercing is not justified.

Judgment

Appeal allowed for Mrs Prest, but on trust grounds. The Court found the properties were held on trust for Mr Prest and could be transferred to satisfy the order.

The Court refused to pierce the corporate veil and narrowed when that doctrine can be used.

Ratio (Legal Principle)

Trust route first: If evidence shows beneficial ownership, use trust/property law.
Veil piercing last: A rare remedy for evasion or concealment when no other tool fits.
Salomon preserved: Control and ownership alone do not merge company assets with personal assets.

Why It Matters

Students learn a clean method: check trusts and beneficial ownership first. Keep veil piercing for truly abusive structures. This keeps company law stable while stopping unfair hiding of assets.

Key Takeaways

Salomon Safe

Separate legal personality remains strong after Prest.

Trust Focus

Look for who truly benefits from the property—follow the money and control.

Rare Veil Piercing

Use only for real evasion or concealment when other routes fail.

Family Orders

MCA powers should not be stretched to pierce the veil where trust law suffices.

Mnemonic + 3-Step Hook

Mnemonic: “T-V-S” — Trust first, Veil last, Salomon safe.

Spot company-held assets in family cases.
Check if the company holds on trust for the spouse.
Apply veil piercing only if there is abuse and no other route.

IRAC Outline

Issue: Can the court reach company-held properties for a divorce order without piercing the corporate veil?

Rule: Veil piercing is a rare exception; use trust/property law where evidence shows beneficial ownership.

Application: Evidence showed companies held properties on trust for Mr Prest; therefore assets could satisfy the order.

Conclusion: Appeal allowed on trust grounds; veil piercing refused; scope of veil piercing narrowed.

Glossary

Corporate Veil: The legal separation between a company and its owners.
Salomon Principle: A company is a separate person from its shareholders.
Beneficial Owner: The person who truly enjoys the property, even if legal title is elsewhere.
Trust: One party holds property for the benefit of another.