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I don’t live in England or Wales, but I’m getting divorced and my pension is there

There are numerous reasons why your pension might be in England and Wales while you are not.  Perhaps you lived and worked in England or Wales then moved abroad, or you live overseas and did a stint of employment here. Whatever the situation, the majority of English and Welsh pension administrators neither recognise nor implement pension orders made in foreign courts following divorce. So, what next?

In order to implement an overseas pension order, English and Welsh pension providers require a local order which mirrors the provisions of the overseas one. But obtaining a local order can be more complicated than it sounds. Pensions are a complicated area at the best of times, but having an international element adds an additional layer of difficulty. The procedure for implementing a foreign pension sharing order used to be governed by the Matrimonial and Family Proceedings Act 1984 (‘1984 Act’) or article 7 of the EU Maintenance Regulation. Following the UK’s departure from the EU, the only avenue remaining is under the 1984 Act.

Under the 1984 Act, the person applying for a local order must not have remarried and must meet certain jurisdictional requirements. As you would expect, it is the latter aspect which is likely to cause the most issues. To satisfy the jurisdictional element, the applicant has to show that they, the other party or the both of them:

  1. were domiciled in England and Wales at the date of their application, or as at the date of divorce in the overseas country; or
  2. were habitually resident in England and Wales for one year before the date of application, or as at the date of divorce in the overseas country; or
  3. had a beneficial interest in possession in a house in England or Wales which was, at some point, used as the matrimonial home.

There is a lot to break down in the 1984 Act; what is domicile and habitual residence? What counts as an overseas country? Has a property been used as a matrimonial home? Even once you pick your way through the jurisdictional points, there are further important statutory provisions to be aware of. For example, a local order cannot be made in respect of pensions if the jurisdictional test is met on the basis of the matrimonial home alone.

If the jurisdictional test is not met, there are alternative ways to account for the pension. For example, in some circumstances, it may be appropriate to offset the value of the pension against other assets in the matrimonial pot or transferring part of the English or Welsh pension abroad. It is important that, if you believe that an order is likely to be made dealing with a pension within England and Wales whilst you live abroad, you seek specialist legal advice as early as possible. A legal specialist will be able to consider with you what is appropriate and possible in your specific case.


Disclaimer

This information is for educational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. © Shoosmiths LLP 2022.

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