Provisions of the Pension Act 1995 and Civil Partnership Act
2004permit a court to order the earmarking of a pension as part of
the financial arrangements on divorce or dissolution of a civil
partnership. This means that when a scheme member's pension comes
into payment the amount specified in the order is paid direct to
the ex-spouse or civil partner by the scheme trustees. These
payments can be regarded as maintenance payments and provided the
other conditions are met relief allowed. The provisions apply to
petitions for divorce presented to a court on or after 1 July 1996
or after 5 December 2005 in relation to civil partnerships.
The full pension remains taxable on the scheme member. The
earmarked pension is not taxable in the hands of the recipient
spouse or civil partner as a pension. If 'Transitional Rules' apply
it can form part of taxable maintenance received. (Re1132)
