Pensions are an increasingly complex area within Family Law. These are even more complex when there is an international element involved. Essentially two separate issues come up. They are:
- Can I get an English Pension Sharing Order against a foreign pension?
- How do I enforce a foreign Pension Sharing Order against an English pension company?
Court Orders against Foreign Pensions
International pensions can offer some advantages to higher earners, for example more advantageous tax allowances. It is crucial to carefully consider the rules of the overseas pension scheme as early as possible during the financial negotiations. Some overseas pensions can be regarded as a further ‘pot’ of capital which can be easily distributed and therefore dealt with in other ways.
In theory there is nothing within the framework of the legislation which prevents a Pension Sharing Order or Pension Attachment Order being made against a foreign pension arrangement however, the mechanisms for achieving the desired result do not apply to foreign pensions. This means that:
The English Courts will only exercise their discretion to make a pension sharing or Pension Attachment Order against a foreign pension scheme if the trustees of the foreign pension scheme have indicated that they will cooperate in implementation of any Order.
It is imperative that confirmation in writing is obtained as early as possible. Appropriate tax advice should also be obtained so that any adverse tax implications can be dealt with.
Enforcing a Foreign Pension Sharing Order
It is important to note that Courts in England and Wales will not automatically enforce Court Orders that are made by a foreign Court against an English pension scheme. It is therefore extremely important to take specialist legal advice in international pension cases.
The only way a couple can obtain an effective Pension Sharing or Attachment Order is by making an application for financial relief after an overseas divorce. This is only possible in circumstances where one of the parties is either ‘habitually resident’ or ‘domiciled’ in England or Wales at the time of the English application.
This is particularly important where only one of the parties has a UK connection and they are the party with the English pension as that party could argue they are not domiciled in England to prevent enforcement of any Pension Sharing Order.
If you are a beneficiary of a foreign Court Order in relation to English pensions, you should not remarry before enforcing the Order in England as you cannot apply to the English Court if you have re-married.
Cases where the English Court Does Not have Jurisdiction
In these types of cases it is likely that an alternative means of dealing with the pension will need to be found for example, it might be possible to transfer the pension registered in this jurisdiction (or part of it) to an overseas pension arrangements against which a Pension Sharing Order made by the foreign Court would be enforced.
Other Practicalities to Consider:
What are the tax implications of the proposed settlement?
What are the scheme rules?
Can any proposed order be enforced?
What are the costs of implementing any Order?
What information can be gathered regarding the pension scheme and who is best placed to get this? A Family Law Solicitor, financial advisor or pension Actuary.
For initial legal advice please call our Family Law Solicitors on 03306069626 or contact us online and we will call you.