We provide a pension sharing report service to help individuals, solicitors and judges understand how pensions should be shared on divorce.
Pensions can be extremely complex, but we try and make our reports as clear and easy to understand as possible. We aim to give you all the information you need to come to a settlement.
Our reports will include:
The cost of our report is £1,500 (inclusive of VAT).
This will usually include two retirement ages as we feel this is more than sufficient for the vast majority of cases.
If you require additional retirement ages or anything out of the ordinary, we may charge additional fees to cover the additional works.
Before commencing our research, we will always agree the fee upfront with you.
Although we can be instructed by individuals, we are typically instructed on a single, joint expert witness basis.
Before instructing us, we would encourage you to speak to us so we can understand what it is your clients are looking to achieve.
A draft letter of instruction can be found here.
Once you have instructed us, we will ask your client to sign a Letter of Authority, which will allow us to liaise with the individual pension providers and schemes.
However, this can take some time and the data gathering stage can be one of the longest tasks.
To speed up the process, we would ask each party to contact their pension scheme directly, as they can often do this online or the pension schemes will respond much faster to individuals, rather than third parties.
We will also need to consider each parties state pension. A state pension forecast can be obtained by completing this form.
Once we have gathered all the information on the pension schemes, we aim to produce the report in two weeks.
We will be available to discuss its contents and answer any questions you may have.
Alex is our Pension On Divorce Expert (PODE). He is a Chartered Wealth Manager and Chartered member of the Chartered Institute for Securities and Investment Institute.
He also holds the Pension Transfer Specialist qualification and holds a Law and Business degree from the University of Liverpool.
We always recommend running the calculations when the last person is eligible for the state pension.
We provide training which can be delivered in person or virtually over zoom/teams. If this is something you are interested in, please let us know at [email protected].
Stage 1 – What are the objectives?
We will review the letter of instruction and enclosed documentation. Should we need more information, or you/we have any questions, we will contact you.
Stage 2 – Gathering the data
It is likely that we will need additional information from the various pension providers.
Once we have received the Letter of Instruction and Letter of Authorities, we will then request the additional information.
Stage 3 – Writing the report
Once we have received the information, we will review the information, perform the calculations and prepare the report.
Stage 4 – Providing you the report
We will provide you with the report and will include any comments that we feel are important to the case.
Stage 5 – Answer any queries
Should you have any questions we are available to answer them.
Should either party require assistance or advice in implementing the order, we are available to help.
Whilst we all want to pay our fair share of tax, we also wish to ensure our families are taken care of after we have gone.
If the value of your ‘estate’ is over a certain threshold, then it could be taxed at up to 40%, meaning your loved ones could receive less than you think.
If your estate is likely to be over the threshold, it is a good idea to consider what steps you can take to potentially reduce this bill.
If your estate is over £325,000, you may be liable for Inheritance Tax and the balance above £325,000 could be taxed at 40%.
The £325,000 threshold is known as the ‘nil rate band’.
Married couples or civil partners can combine their nil rate bands, with up to £650,000 of their estate effectively shielded from Inheritance Tax.
Should the surviving spouse or civil partner leave the property to their direct descendants (children and grandchildren), then each spouse would receive a further £175,000 in what’s known as the ‘residential nil rate band’.
For most married couples who pass their property onto their children when they die, this usually means up to £1million is IHT free, with the balance subject to IHT at 40%.
Although this sounds like a huge amount, rising house prices over the past few years have led to many Britons estates surpassing the threshold and tax receipts for Inheritance Tax were over £6billion in 2021.
For couples without children or not married or in a civil partnership, this is particularly important as they may not benefit from either the partners nil rate band or both residential nil rate bands.
Before even looking at ways to reduce Inheritance Tax, we will firstly work out how much you need to live on and calculate if you are at risk of running out of money throughout your retirement.
After all, why potentially give away money now to reduce your IHT bill if this will leave you short in the future.
If you do require Inheritance Tax planning advice, we can consider:
Life cover equal to the potential IHT liabilityBy engaging our services, we will holistically consider all of the available options in deciding what is the most appropriate for you and your loved ones.
Each individual has a £325,000 nil rate band, so for married couples this is £650,000.
Furthermore, each individual has a residential nil rate band of £175,000 if they pass their main residence to their direct descendants.
Combining this would leave most married couples with a threshold of £1,000,000. The residual estate above this would be taxed at 40%.
It is worth highlighting that for estates above £2million, the residential nil rate band is reduced by £1 for every £2 above £2million.
In simple terms, for estates above £2.35 million, the residential nil rate band is removed entirely.
There are a variety of gifts you can give away during your lifetime including:
You can make larger gifts than this and if you live beyond 7 years, then Inheritance Tax will be due (assuming your estate is over the IHT threshold).
This is known as a ‘Potentially Exempt Transfer’.
However, if you die within 7 years, IHT will be due. If you live beyond 3 years, you can benefit from taper relief which can reduce the ultimate IHT liability.
If you gift something away but still benefit from it, this is known as a gift with reservation.
The value of it will still count towards your estate.
For this to be outside of your estate, you would have to pay market rent.
Heritage Financial Planning is a trading name of 2plan wealth management ltd which is authorised and regulated by the Financial Conduct Authority (FCA). It is entered on the FCA register (www.fca.org.uk) under reference 461598.
Registered office: 2plan wealth management Ltd, 3rd floor, Bridgewater place, Water Lane, Leeds, LS11 5BZ. Registered in England and Wales. Number: 05998270
