Spouse's Pension Share

Pricey03

I’ve just started receiving retirement income from an income drawdown scheme.
I have been self employed for 13 years and I am still receiving self employed earnings that I declare on my annual Self-Assessment Tax Return.
Although, I am self employed my income drawdown scheme provider, Hargreaves Lansdown, insist on paying the income via PAYE after tax has been deducted.
My wife and I separated, amicably, 14 years ago and she is entitled to a proportion of the proceeds of two pension schemes that existed before our separation.
1 Am I able to claim the payments against tax?
2 Will my wife have to declare the payments?
3 Could I, legally, insist on HL paying me before tax has been deducted as is the case with my self employed earnings

jamesd

Pension income is paid using PAYE but without any NI deductions, which don't apply to pension income. HL will use whatever tax code HMRC tells them to use. It's unlikely that you could persuade HMRC to use a code for no tax but even if you did it's moot because you'd have to declare it all on your tax return as your own income.

Splitting pension income would normally in the case of divorce today be handled by a pension splitting order that would transfer the correct proportion of the pension pot to each person so that they are then independent of each other in the future. In such cases her tax code would be used for her income and yours for your own.

In your case it appears that there has been no divorce and no pension splitting order. She would not have to pay tax because the income has already been taxed as yours. The income would count for determining her eligibility for means tested benefits.

But maybe there has been a divorce and the legal arrangements specify how the income is to be treated?

Your wife appears to be poorly protected unless your expression of wishes forms for the pensions transfers a suitable amount of capital to her. It may also be wise for her to take out life assurance on your life to protect her interests if she hasn't done it already.