Temporary Divorce to Transfer Pension Assets to my wife?

michaels

Could my wife and I divorce, agree that she gets the pension pot as her settlement and then remarry?

Two potential advantages:
Avoiding the lifetime pot size limit
If she were older than me the lump sum and pension would be available sooner.

Thoughts?

ajbell

or divorce and marry someone with a better pension than you?.

Aegis

michaels wrote: »

Could my wife and I divorce, agree that she gets the pension pot as her settlement and then remarry?

Two potential advantages:
Avoiding the lifetime pot size limit
If she were older than me the lump sum and pension would be available sooner.

Thoughts?

In theory this is legal, but it very clearly constitutes abuse of the spirit of the law, which is covered under the General Anti Abuse Rules and could be unwound. Worse yet, instead of unwinding HMRC could argue that the entire transfer was actually an unauthorised payment and tax the scheme accordingly.

I haven't recommended that anyone try this yet despite having several clients with lifetime allowance issues - the above reasoning is why.

michaels

Aegis wrote: »

In theory this is legal, but it very clearly constitutes abuse of the spirit of the law, which is covered under the General Anti Abuse Rules and could be unwound. Worse yet, instead of unwinding HMRC could argue that the entire transfer was actually an unauthorised payment and tax the scheme accordingly.

I haven't recommended that anyone try this yet despite having several clients with lifetime allowance issues - the above reasoning is why.

Thanks
6789

kidmugsy

Hold on: why remarry? What if you divorce and then scuttle off overseas, and live together there? HMRC won't know if you don't tell them. Perhaps have different addresses for the first couple of years so that if there is trouble later on you can argue that the separation was real, the reunion unexpected.

Can't you nowadays just write your letter of wishes asking for the remaining pension sum to pass to your ex-wife - she needn't be your wife.

Hm: but I suppose it's rather a high risk venture. Or could you go and become resident in Portugal, get all your pension money out tax-free, and then assume that you'll vanish off HMRC's radar once the pensions are closed?

I suppose legal wrangles with HMRC are undesirable in your declining years: added hassle and reduced intellectual acuity are an unpleasant combination.


As so often, maybe the best idea is to pay your taxes and thank your lucky stars that you are rich enough to owe them.

michaels

kidmugsy wrote: »

Hold on: why remarry? What if you divorce and then scuttle off overseas, and live together there? HMRC won't know if you don't tell them. Perhaps have different addresses for the first couple of years so that if there is trouble later on you can argue that the separation was real, the reunion unexpected.

Can't you nowadays just write your letter of wishes asking for the remaining pension sum to pass to your ex-wife - she needn't be your wife.

Hm: but I suppose it's rather a high risk venture. Or could you go and become resident in Portugal, get all your pension money out tax-free, and then assume that you'll vanish off HMRC's radar once the pensions are closed?

I suppose legal wrangles with HMRC are undesirable in your declining years: added hassle and reduced intellectual acuity are an unpleasant combination.


As so often, maybe the best idea is to pay your taxes and count your lucky stars that you are rich enough to owe them.

I don't want to break any rules but where the rules are framed to allow something then I can't see that it is imoral to do that thing. For example is it 'wrong' to salary sacrifice to less than 50k to keep an entitlement to child benefit?

TH1878

michaels wrote: »

I don't want to break any rules but where the rules are framed to allow something then I can't see that it is imoral to do that thing. For example is it 'wrong' to salary sacrifice to less than 50k to keep an entitlement to child benefit?

You can't see anything wrong in getting divorced as a tax fiddle.

Jesus wept.

PasturesNew

TH1878 wrote: »

You can't see anything wrong in getting divorced as a tax fiddle.

Jesus wept.

Don't worry, if/when his wife gets wind of this she'll whoop his 4ss from here to the middle of next year .....

Dird

PasturesNew wrote: »

Don't worry, if/when his wife gets wind of this she'll whoop his 4ss from here to the middle of next year .....

Maybe she doesn't have to know.
*while Eastenders is playing* "sign this will you honey"

bigadaj

TH1878 wrote: »

You can't see anything wrong in getting divorced as a tax fiddle.

Jesus wept.

Well it's constantly debated as to whether getting married should or shouldn't be a tax fiddle..

Freecall

Has the concept of right and wrong completely disappeared in the world?

Why not go the whole hog, you could have a second home and claim that you are separated to get the reduced Council Tax.

And if the distinction between simply fibbing to gain advantage and outright lawbreaking disappears then all sorts of opportunities open up such as benefits claims and 'sharing' any penalty points on your driving licences.

Some of us find comfort in simply knowing that we are doing the right thing in life.