Posted November 27th, 2012
We all know, or know of people that have managed to get married abroad. It probably doesn’t work out much more expensive than a lavish ceremony on these shores. Wouldn’t it be curious to find an agency set up to help you get divorced abroad?
“They got divorced? When did that happen?”
“Yeah they’ve been divorced a couple of months now, they got divorced in the Seychelles!”
“Pffft…..it’s alright for some, me and the ex had to make to do with a divorce in Wolverhampton!”
In reality though, the only money held abroad in divorces tends to be offshore bank accounts that Mr. Taxman doesn’t know anything about……….yet!
That is, until a disgruntled soon to be ex-partner tells him about it, and handsomely rewarded they will be for it as well. Of course, marriage, or the dissolution thereof, doesn’t have any relevancy when it is an ex business partner blowing the whistle. However, according to HMRC, there are significant number of tip offs are coming from ex partners.
As the waters separating the terms “evasion” and “avoidance” get ever muddier (avoision if you will) it’s a made up word intended to nod at the notion that evasion and avoidance are becoming entwined but I’ll change it to aversion if you think it would make more sense, let’s not debate here on the rights, wrongs or other loopholes surrounding the whole Tax debate currently.
Fact is, it’s more incumbent on you to be up front. Hiding money from the tax man is one thing – and it can land you in prison. Hiding money that is due to a disgruntled ex is positively like dicing with death!
Be up front, and then you might avoid finding yourself being upfront in front of a Judge.
image credit: flickr.com/banjo_d
Posted August 25th, 2012
Question: My husband is in receipt of a war disability pension. Is it possible to have a pension order placed against it?
Answer : Unfortunately you are not able to have a pension sharing order or an attachment order applied against the War Disability Pension. However, there will be main army pension benefits payable and it is possible to have a pension sharing order placed against these benefits. Given the extra income payable via the war disability pension, then with sensible discussion would it be possible to increase the pension sharing order under the main army scheme benefits.
In addition I see no reason why this would not count towards maintenance and a periodic payments order may be made.
Posted August 24th, 2012
My attention was drawn to an interesting Twitter debate recently with regard to 0% pension sharing orders. The premise being that this prevents any further comeback on maintenance variation by way of pension income.
My concern here is that this is heresay, however, it is possible for a 1% pension sharing order to be completed which would dispel any future claim on the pension. It should be noted that you cannot have a pension sharing order on a pension that already has a pension sharing order on it.
Practically though, how would a 1% transfer value work, and it also should be noted that the costs might outweigh any benefits. However, it could be argued that this is a reasonably innovative way of dealing with pension sharing.
Posted August 22nd, 2012
An interesting development with Divorce Lifeline – www.divorcelifeline.co.uk.
It is interesting to note some of the claims being made by the company in relation to pensions and also their credentials to be in this market in the first place.
However, there is a growing trend towards looking at the settlements that clients are getting and it is in the divorce solicitors best interests to look at how a pension settlement is arrived at.
As a Resolution Accredited Independent Financial Adviser, I do see many mistakes made and we are here to help.
Posted August 21st, 2012
Question: The pension provider is refusing to implement the Pension Sharing Order without the signature of my ex spouse. Ours was an acrimonious divorce and he is extremely unlikely to comply with this request. What can I do?
Answer: Often Pension providers have a number of requirements to be completed by both parties, including the court documentation and other such requests, such as signing an indemnity by the ex spouse.
If it is not possible to do this then I would remind the Trustees of their obligations under the Court Order/Pension Sharing order and that it is their responsibility to implement the order in a timely manner. If they do not do so, threaten to report them to the Pension Regulator. This usually has the desired effect and hopefully your Order will be implemented promptly.
Posted December 24th, 2010
Pension Attachment (earmarking) – Need advice now?
Why not book a free no obligation review of how pension attachment / earmarking affects you.
Unfortunately, there is a lot of misinformation out there on what can and cannot be done with pension earmarking.
I offer a free 30 minute consultation by telephone so why not call me now on 0800 092 1229 to arrange or send an email to firstname.lastname@example.org Virtual sessions available webcam too!
Posted October 23rd, 2009
I am often asked why earmarking is not used more often. Since 1996 such settlements have been available but not widely used.
My own view is that in certain circumstances an earmarking order can have its merits and if drafted correctly, with the right protections placed around it, can ultimately meet a client’s needs.
However, there are a number of key limitations which need to be fully understood. It will pay to review your options in full and ensure that if earmarking is deemed to be appropriate, you have discounted the other options of pension sharing and pension offsetting, and vice versa.
I have set out below some of the main advantages and disadvantages of this option.
• It allows for both the tax free cash benefit as well as the pension income benefit to be earmarked.
• Death in service benefits can also be earmarked.
• It is possible to use an earmarking order in circumstances of judicial separation and nullity not just on divorce.
• It cuts across the clean break principle as the pension holder can decide when to draw the pension and lump sum benefits, perhaps delaying this beyond their normal retirement.
• The benefits payable to the ex-spouse cease when the pension holder dies.
• Often, the ex spouse has no control over how the funds are invested (and therefore this could be in higher risk assets).
• The member could (out of spite) opt out of the original scheme and start a new post divorce arrangement potentially reducing the earmarked benefit.
• The automatic termination of the court order on remarriage of the ex spouse is a clear incentive to continue to cohabit.
• The entire pension is taxed in the hands of the pension holder and earmarked payments are made after tax has been paid. Often this will not be tax-efficient for the ex-spouse.
Have you fully reviewed your options on divorce? How in control do you feel on your decision-making? Should you consider earmarking and how much should be earmarked?
If you wish to discuss any of the issues here, please call me in confidence on 01204 663904.