Act Now To Secure UK-Based Pensions, Warn Lawyers
In a matter of months it may become impossible for UK-based pensions to be counted as part of an overseas divorce settlement, warn family law experts, as the clock ticks down on a trade agreement following Brexit.
With Brexit trade negotiations looming on the horizon, a crucial rule is unlikely to apply to the UK anymore – meaning UK-based pensions could be out of reach in overseas divorces and spouses won’t be able to have their ex’s UK pension as part of the divorce if they’re no longer UK residents.
How or even whether to split a pension at all in a divorce can be tricky, and is complicated further if the parties aren’t based in the UK. At the moment the English courts can hear financial cases after an overseas divorce as long as one of the parties is domiciled or resident in England, or there’s a matrimonial home in England in which at least one party has a beneficial interest in.
If these criteria can’t be met, then the EU has an important rule known as the ‘forum of necessity’. This means where no other EU country has a clear jurisdiction, a case can be heard in any of the member states as long as there’s enough of a connection to that country – such as previously living there.
Expert Opinion“Brexit is going to change the face of international divorce law if there isn’t an agreement made by the end of the year and, as it stands, UK-based pensions will no longer be up for grabs for many who find themselves getting divorced abroad.
“Pensions can be a serious asset to contend with for the financially weaker party, with some valued in the hundreds of thousands or millions of pounds. To lose access to this would be a real blow at an already immensely stressful time for those needing financial provision after their marriage has ended.
“It’s hoped some sort of solution may be provided, but there aren’t any guarantees and so any expats going through a divorce (or even foreigners who used to live in the UK and have pensions there) should absolutely be made aware of this impending deadline.” Kathryn Evans - Senior Associate Solicitor
There’s a growing trend in emigration from the UK. A BBC report suggests that an estimated 5.5m British people live permanently abroad – almost one in 10 of the UK population – while the WZB Social Science Centre found a 30% rise in UK citizens moving to EU countries since 2016.
From a legal perspective, difficulties can arise when parties divorce overseas but still have assets based in the UK. Commonly, parties have lived and worked in the UK for a number of years, while also contributing to English-based pensions.
Kathryn continued: “Formal applications that rely on the EU Maintenance Regulations for sharing pensions on divorce are now a ticking clock. As a divorcing couple, if you live abroad and still have pensions based in the UK, it is time to seek urgent advice from a specialist family law solicitor in the UK.
“If proceedings aren’t brought swiftly, then it might end up becoming impossible for some spouses to divide their ex’s UK pension as part of the settlement, where it would otherwise have been accessible.”