Expat Pensions & Divorcehttp://lawyersinbalance.com/wp-content/uploads/2016/12/Pension-sharing-order-advice-1024x680.jpg 1024 680 Strategic Wealth Management Strategic Wealth Management http://0.gravatar.com/avatar/f86d269a306230db06b3453567be695f?s=96&d=mm&r=g
If you have a client that has left the UK to live in another country, no doubt they will accept that its laws will apply to their day to day life. Often the complexities of foreign property purchase laws are their first introduction to its legal system.
However, they may not necessarily expect local rules to apply to their personal status – such as the recognition of marriage, or divorce, or their obligations arising from a divorce. To a surprisingly large extent, many clients often assume that they carry the law of their country of origin along with them.
Even within Europe, different countries’ approaches to divorce and family law can vary significantly. The extremes range from Malta, which has no divorce, through to the highly egalitarian Scandinavian approach that simply assumes that other than in special cases, each party can simply get on with their lives without further obligations. Different countries have different criteria as to how one can apply for divorce. Residence is of course the main basis, but certainly not exclusively so.
There is a rule between EU countries that says that the first country of filing takes priority – which simply means the first person to file for divorce wins the “race” for jurisdiction. This was meant to simplify matters. Instead, it has added to complexity, and the outcomes can be very different. A recent attempt to harmonise financial settlements across borders ended in more or less complete failure.
Clients that have left the UK and live abroad need to take specialist advice regarding the pension sharing options in divorce. A court order in one country may not be enforceable in the UK and there is a risk of incurring an Unauthorised Payment Charge of up to 55% if a pension fund is shared with a spouse based on a Court Order issued outside the UK. Offsetting cold be a solution, in return for specified assets the claimant gives up a claim on the spouses pension.
At Strategic Wealth Limited we work with professional advisers and private clients to guide them through the options for their pension in a divorce. These can include UK Self Invested Personal Pensions (SIPPs), Qualifying Recognised Overseas Pension Schemes (QROPS) and Qualifying Non UK Pension Schemes (QNUPS). Our UK qualified team of experienced international advisers can work with you and your client to find the best solution.