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Divorcing expats QROPS cash ruled safe from UK law
| Published: | 22 Nov at 6 PM |
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Divorced British expats may be relieved to learn their QROPS pension scheme cash is safe from being split up according to UK law.
Retiring overseas as a married couple doesn’t always turn out as planned, with divorce not uncommon amongst expats. Making adjustments not only to life as retirees but also to an unfamiliar culture and environment can put unbearable strains on less than stable relationships, as can the temptation to succumb to younger, more attractive charms.
A recent UK family court judgement settled once and for all the thorny question of whether UK divorce laws pertaining to the splitting up of assets can be enforced when one or both former partners are domiciled overseas. The initial, long-running case involved a former couple living in India who divorced in 2013, and concerned the wife’s right to a share of her ex-husband’s QROPS pension fund.
After a UK court battle lasting several years, the ex-husband was ordered to pay his ex-wife a lump sum in cash as well as regular maintenance, in accordance with British divorce laws. The pensioner appealed the court’s decision, claiming that, as he’d transferred his pension pot of £87,000 to an India-based annuity, the British court had no power to force him to comply with UK law.
The appeal court’s judgement was based on a question of jurisdiction regarding the Family Court’s order transferring part of one spouse’s financial interests to the other spouse outside a 1973 statutory scheme. Basically, the ruling stated that Family Courts have no power outside the UK as regards making sharing orders on overseas pensions. The ruling would apply even if the spouse’s country of residence was willing to enforce such an order.
The UK hearing wasn’t the first on this touchy subject, with decisions in previous cases placing QROPS cash out of reach of the British courts in divorce or legal separation cases. Spouses who feel strongly about their rights to part of a pension scheme can only apply to the fund’s country of origin or leave their applications open in case the money is brought back into the UK.
Retiring overseas as a married couple doesn’t always turn out as planned, with divorce not uncommon amongst expats. Making adjustments not only to life as retirees but also to an unfamiliar culture and environment can put unbearable strains on less than stable relationships, as can the temptation to succumb to younger, more attractive charms.
A recent UK family court judgement settled once and for all the thorny question of whether UK divorce laws pertaining to the splitting up of assets can be enforced when one or both former partners are domiciled overseas. The initial, long-running case involved a former couple living in India who divorced in 2013, and concerned the wife’s right to a share of her ex-husband’s QROPS pension fund.
After a UK court battle lasting several years, the ex-husband was ordered to pay his ex-wife a lump sum in cash as well as regular maintenance, in accordance with British divorce laws. The pensioner appealed the court’s decision, claiming that, as he’d transferred his pension pot of £87,000 to an India-based annuity, the British court had no power to force him to comply with UK law.
The appeal court’s judgement was based on a question of jurisdiction regarding the Family Court’s order transferring part of one spouse’s financial interests to the other spouse outside a 1973 statutory scheme. Basically, the ruling stated that Family Courts have no power outside the UK as regards making sharing orders on overseas pensions. The ruling would apply even if the spouse’s country of residence was willing to enforce such an order.
The UK hearing wasn’t the first on this touchy subject, with decisions in previous cases placing QROPS cash out of reach of the British courts in divorce or legal separation cases. Spouses who feel strongly about their rights to part of a pension scheme can only apply to the fund’s country of origin or leave their applications open in case the money is brought back into the UK.
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