What happens to English pensions on an overseas divorce?

When considering finances on divorce, it is important to consider how pensions should be dealt with as they can often form one of the largest assets in a relationship. However, if divorce proceedings are taking place in a country other than England or Wales, a foreign court will not be able to make orders relating to English pensions that can then be implemented by the English pension provider. 

It is not uncommon to have had an established career in England and Wales, building pensions along the way, and then to relocate abroad. If you are married (whether here or abroad) and the marriage then breaks down, divorce proceedings may potentially be issued overseas. However, this means that the foreign court will be unable to deal fully with the English pensions when deciding how the financial assets are to be shared.

Can anything be done?

Potentially, yes. Part III of the Matrimonial and Family Proceedings Act 1984 (“Part III”) enables applications to be made for financial provision following an overseas divorce. This includes consideration being given to pensions that are held in England and Wales, and orders being made for them to be shared with a former spouse.

The above being said, it is still necessary to demonstrate that you have jurisdiction in England and Wales before being able to apply under Part III. This means that you would have to show that, if you were seeking for orders to be made against an English pension:

• Either you or your former spouse is, on the date of the application for permission to apply under Part III or the date of the foreign divorce, domiciled in England and Wales; and/or
• Either you or your former spouse was habitually resident in England and Wales for one year ending with the date of the application or the foreign divorce.

Therefore, you or your spouse simply holding a UK pension will not necessarily enable you to apply for pensions to be dealt with under Part III. You would need to show domicile or one year’s habitual residence. Whilst there are calls for reform in this area to enable UK pensions to be considered regardless of domicile or habitual residence, such calls remain unheeded at present.

If you are able to establish jurisdiction, it is then necessary to apply for permission to make an application under Part III, such permission being granted if there is a substantial ground for making an application. 

If you are divorcing overseas and there are English pensions, it is important to consider the following:

• Are there other assets against which the value of the English pensions could be offset? Independent pensions advice would be needed as to the merits or otherwise of this.
• Is it possible for an agreement to be reached for a Part III order to be made by consent following the overseas divorce? By obtaining advice at an early stage from an English solicitor specialising in international divorce, a commitment can potentially be made in the overseas divorce for a Part III pension sharing order to be sought by consent from the English courts upon conclusion of the overseas divorce.

Our specialist international family lawyers are able to advise in relation to financial provision following an overseas divorce, to include in relation to the treatment of English pensions.