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bigduckontax, Accountant
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I am retired and have two personal pensions which take me over

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I am retired and have two personal pensions which take me over my tax allowance so have to pay income tax. If I agree to pension share as part of a divorce settlement does this reduce my income and therefore reduce the amount of income tax I pay ?

Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.

Here is the information from the Money Advice Service:

'you’re awarded a percentage share of any one (or more) of your ex-partner’s pensions. This share is either transferred into a pension in your own name or you’re able to join your ex-partner’s pension scheme. If the pension is transferred to you and you don’t already have your own pension, you’ll have to set one up.'

Thus the transferred part of the pension becomes the property of the receiving partner and any income therefrom becomes part of their tax laibilities. Conversely the losing partner's income falls by a similar amount and thus their taxable income reduced. A lessening in their tax bill follows.

I do hope that I have assisted you in your tax planning with my answer.

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