Divorce and pension sharing as an expat?
Pension Sharing Orders for UK company pensions are increasingly common and relatively straightforward. However, if you are an expat with a UK–based pension, or a foreign national who acquired one whilst working there, and you get divorced, you will find that foreign court orders cannot be used to transfer a pension based in the UK. The Courts of England and Wales will not automatically enforce orders made by foreign courts in relation to pensions, so if you are going through a divorce it is crucial for you to seek advice from an international cross-border financial expert before a final order is made in a foreign jurisdiction.
What is a Pension Sharing Order (PSO)?
Courts can order either of the divorcees to split their pension as part of the overall divorce settlement. This requires one party to transfer a percentage of their pension into an alternative pension scheme.
What are the complications?
Due to licencing laws, most UK financial advisers are unable to advise those residing in another country and Pension Sharing Orders specifically require pensions to be transferred to UK schemes. Finding a suitable scheme that will accept expats whilst navigating various costs, such as exit penalties, can cause a variety of problems.
Solutions for expats
If you are an expat,who resides outside of the UK, any money from a pension must go to an HMRC-recognised scheme such as an International SIPP.
An International SIPP enables you to transfer and consolidate benefits from UK–registered pension schemes easily and efficiently to your new country of residence, while still providing you with protection under UK regulations.
What if I have a Pension Sharing Order for a member of a QROPS?
QROPS are held offshore, often unregulated with non-UK standard assets, which can create some further unique challenges. Again, Harrison Brook are international pension specialists and can help find a solution to suit your needs.
Next steps for Divorce and pension sharing as an expat:
You need to speak to a specialist cross-border Independent Financial Adviser.
At Harrison Brook, we understand that everyone has different goals in life, and we take our time to analyse your personal circumstances in order to find a bespoke recommendation tailored to your precise requirements. Unlike most expatriate financial advisers, we offer a fully transparent fee–based advice service. We also have plenty of experience on our side, having helped numerous clients resolve such pension issues quickly and efficiently.
Harrison Brook is the leading international online broker of expatriate financial services, products and financial advice.
Get in touch with us for assistance in complying with a PSO for your UK pension.