PSI3.5.2 - Membership of Schemes: Pension Sharing on Divorce – Background

(This archived guidance relates to HMRC discretionary practice before the 6th April 2006. For current guidance on Registered Pension Schemes see the Registered Pension Schemes Manual)

Since the 1970s it has been possible for the courts to include the value of benefit rights in an approved scheme as part of a divorce settlement. The value of the pension rights can be offset against the value of other assets included in the settlement, for example if the scheme member had pension rights that were valued at £100,000 the scheme member's ex-spouse can be allocated another asset to a similar value, such as the family home. Alternatively, an attachment or earmarking order can be placed on the scheme member’s benefits when they come into payment. For example, when a scheme pays a pension to the scheme member there would be requirement for the scheme to make a maintenance payment out of the pension direct to the scheme member’s ex-spouse.