Divorce and pension sharing as an expat — Hoxton Capital Management
Divorce and pension sharing as an expat
The subject of divorce has once again been brought to the forefront of many people’s minds by the news of Bill and Melinda Gates going their separate ways. The Gates were married for 27 years before calling it off and this is by no means an uncommon situation. The culminative divorce rate in the UK over a 50-year period from 1967 to 2017 was 33.3%. Whilst admittedly most people don’t have to negotiate the split of $130 Billion, divorce can still be a complicated process, especially when assets are illiquid or currently untouchable, such as a pension pot.
Pension Sharing Orders (PSO)
One of the biggest hurdles for expats in this situation is that the courts of England and Wales will not automatically enforce orders made by foreign courts in relation to pensions.
Typically, pension sharing orders are relatively straightforward and fairly common in the UK, it is only when the order is made through a foreign court that an issue is likely to arise. A PSO, as the name suggests, is where a court orders the divorcees to split their pension as part of the divorce settlement. A percentage share of any pension is awarded to the ex-partner. This share may be transferred into the clients’ own name, which could be an existing or a new plan. Or the client may be given the option to join the ex-partner’s pension scheme.
Originally published at https://hoxtoncapital.com on June 16, 2021.