Many couples separating abroad do not realise that English pension providers cannot implement orders about pensions made by foreign courts.
Increasing numbers of families are choosing to spend time experiencing life in different countries after periods of time living and working in the UK. Many people will accrue significant pension funds from their employment in the UK before moving abroad, with the pensions often remaining in the jurisdiction for tax and planning purposes.
If a marriage breaks down abroad, many couples choose to formalise the separation of their assets, income and pensions by way of a divorce in the country they are in at the time.
However, an unusual point that most couples divorcing abroad (and their lawyers in that country) do not realise is that an English pension cannot be shared without an order from the court of England and Wales. A foreign order that includes provision for sharing of English pensions will not be accepted by English pension providers. Often, this means that a separated couple are left with a foreign order which cannot be implemented, and with no clear solution as to how to resolve the problem.
Provided that the English court has jurisdiction, an application may be made under Part III Matrimonial and Family Proceedings Act 1984, enabling the court to make further financial provision after an overseas financial settlement. In order for the English court to have jurisdiction, the applicant must not have remarried, and there must be sufficient connection to England and Wales – at least one of the parties must have been domiciled or habitually resident (i.e. living here for at least a year) before the application is made.
For anyone looking to divorce whilst living abroad, it is important to get legal advice in both jurisdictions in order to make informed decisions about which country should handle the divorce, and the financial settlement that can be achieved in that country, before any decision is made about how to proceed. Consideration will need to be given as to where assets and pensions are located, the parties’ connections to England and Wales, whether English pensions may be shared and by which court, or whether alternative options, such as pension offsetting, should be considered instead.
This is not a straightforward issue, and if English pensions are to be shared as part of a foreign divorce settlement, it is advisable to seek early advice from a family lawyer specialising in pensions and international divorces, for there to be a line of communication between the lawyers in both countries, and to ensure that there is certainty over the steps that can and should be taken in both countries and the appropriate timing.
The Family team at Michelmores regularly advises in relation to the treatment of English pensions on a foreign divorce. We are used to working hand in hand with family lawyers abroad to ensure that the process across both jurisdictions is handled in an efficient, streamlined and cost-effective way.
For more information, please contact Sarah Green.
