Can You Transfer a SIPP to Your Spouse? International SIPP Rules for UK Expats

A question that commonly arises is can you transfer a SIPP to your spouse?

The short answer is that it generally cannot. UK pensions are individually owned arrangements, and that principle applies equally to International SIPPs. However, while ownership of a pension cannot usually be transferred during the member’s lifetime, there are circumstances in which pension wealth can pass to a spouse.

Understanding the distinction between pension ownership and pension wealth is important when developing a long-term retirement and estate plan.

This article explains how International SIPP ownership works, when pension wealth may pass to a spouse, and how expat couples can incorporate pension assets into broader retirement and succession-planning strategies.

Can You Transfer a SIPP to Your Spouse?

In most cases, no. A SIPP cannot normally be transferred directly to a spouse during the pension holder’s lifetime because UK pensions are individually owned arrangements. The same principle applies to international SIPPs.

For expatriates, this is often where confusion arises. The term International SIPP is widely used within the expatriate market, but it is not a separate legal pension category under UK pension legislation. Instead, it typically refers to a SIPP that has been designed, administered or marketed with internationally mobile investors in mind.

Regardless of how the arrangement is described, ownership remains with the individual member.

A common misconception is that a spouse can be added as a joint owner of an International SIPP. In practice, UK pensions are not generally designed to be jointly owned. While a spouse can often be nominated as a beneficiary, ownership of the pension normally remains with the member throughout their lifetime.

This distinction matters because pension ownership and pension wealth are treated differently. Although a spouse cannot usually receive ownership of the pension while the member is alive, there are circumstances where pension assets can ultimately benefit a spouse.

These circumstances most commonly arise:

• Following a divorce or dissolution through a court-approved pension settlement.
• Following the death of the pension holder through pension death benefits.

For many expat couples, the more relevant question is not whether ownership can be transferred, but how pension wealth can be incorporated into retirement planning and eventually passed to the surviving spouse.

When Can Pension Wealth Pass to a Spouse?

Although a SIPP cannot usually be transferred directly to a spouse during the member’s lifetime, pension wealth can still form an important part of family financial planning.

The table below summarises the situations in which a spouse may benefit from pension assets.

For internationally mobile families, these rules mean retirement planning often focuses on coordinating pension provision across both spouses rather than transferring ownership of existing pension arrangements.

SIPP Transfer to a Spouse Following a Divorce

Divorce is one of the few circumstances in which pension rights can be transferred from one spouse to another.

Where a marriage or civil partnership ends, the court may determine that pension assets should form part of the overall financial settlement. Depending on the circumstances, part of a SIPP may be allocated to a former spouse or civil partner.

Before pension rights can be assessed, the pension provider will typically supply a cash equivalent transfer value (CETV). This represents the estimated value of the pension benefits and is commonly used during settlement negotiations.

The treatment of pension rights can differ depending on where proceedings take place within the UK.

There are three principal methods used when dealing with pension assets following divorce or dissolution:

1. Pension sharing.
2. Pension earmarking.
3. Pension offsetting.

Pension Sharing

Pension sharing is generally the most common method used when pension assets are divided following divorce.

A court order specifies the proportion of pension benefits that will be transferred to the former spouse. Once implemented, the recipient receives a pension credit, which becomes their own pension entitlement separate from the original member’s benefits.

This approach is often viewed as providing a cleaner financial separation because each individual retains control over their own pension arrangements going forward.

A pension credit awarded from a SIPP will typically be transferred into a pension arrangement in the recipient’s own name, subject to the rules of the receiving scheme.

The implementation of pension-sharing orders can differ from arrangements involving defined benefit schemes, and the benefits available to the recipient may depend on the type of pension involved.

Once the pension credit has been established, the recipient’s benefits are generally governed by the rules of their pension arrangement and the pension legislation in force at the time benefits are accessed. This includes the rules governing pension access and any tax-free lump sum that may be available.

Pension Earmarking

Pension earmarking, also known as pension attachment, operates differently.

Rather than creating a separate pension entitlement for the former spouse, the pension remains in the member’s name. When benefits are eventually paid, a specified proportion is directed to the former spouse under the terms of the court order.

Depending on the jurisdiction and the order itself, earmarking may apply to:

• Tax-free lump sums.
• Pension income.
• Certain death benefits.

Unlike pension sharing, earmarking does not always create a complete financial separation between former spouses. Future payments may remain linked to the member’s decisions regarding retirement and benefit access.

Pension Offsetting

Pension offsetting allows one spouse to retain their pension benefits while the other receives assets of equivalent value from elsewhere within the marital estate.

For example, one party may retain their pension while the other receives a greater share of property, investments or cash assets.

For internationally mobile families, pension offsetting may sometimes be attractive where one spouse intends to retain an International SIPP as part of a long-term retirement strategy while the other prefers access to non-pension assets.

However, comparing pension rights with other assets can be complex because pensions and non-pension assets may have different tax treatment, liquidity and long-term value considerations.

As a result, specialist advice is often valuable when pension assets form a significant part of a divorce settlement.

How Can You Include Your Spouse in International SIPP Planning?

Although a SIPP cannot usually be transferred directly to a spouse, there are several ways expat couples can incorporate both partners into a coordinated retirement and estate-planning strategy.

For many internationally mobile families, the objective is not to transfer pension ownership but to ensure pension wealth supports both spouses throughout retirement and can be passed efficiently to the next generation when appropriate.

This often involves considering pension arrangements alongside broader financial planning objectives, including tax residency, retirement income requirements, succession planning and potential inheritance tax exposure.

The following strategies may help achieve those objectives.

1. Contributing to a spouse’s pension.
2. Leveraging available tax allowances.
3. Structuring beneficiary nominations within a SIPP.
4. Coordinating retirement withdrawals.

Contributing to a Spouse’s Pension

Instead of transferring an existing SIPP, you may be able to build pension provision in your spouse’s own name.

Many expatriates assume pension contributions can only be made by the pension holder. In practice, contributions can generally be made on behalf of a spouse, subject to the applicable pension and tax-relief rules.

This can help couples spread retirement assets across two pension arrangements rather than concentrating pension wealth in a single account.

Individuals with relevant UK earnings can generally make tax-relievable pension contributions up to the lower of their relevant earnings and the applicable annual allowance, currently £60,000.

Those who qualify as relevant UK individuals but do not have relevant UK earnings may generally receive tax relief on contributions of up to £3,600 gross per tax year.

Where available, building pension provision across both spouses may create greater flexibility when retirement income is eventually drawn.

Leveraging Available Tax Allowances

Couples may also benefit from reviewing available allowances and reliefs across the household rather than focusing on each spouse individually.

One example is the UK Marriage Allowance, which may reduce income tax by transferring part of one spouse’s Personal Allowance to the other where the eligibility conditions are met.

You may qualify if:

• You are married or in a civil partnership
• One partner has income below the Personal Allowance
• The other partner is a basic-rate taxpayer

Although UK allowances may not reduce tax liabilities in every country of residence, they can still form part of an overall tax-planning strategy for some expatriate households.

Structuring Beneficiary Nominations Within a SIPP

Beneficiary nominations are often one of the most important elements of pension estate planning.

Unlike many other assets, UK pensions do not normally pass under the terms of a will. Instead, pension providers typically consider the member’s nominated beneficiaries when deciding how death benefits should be distributed.

Submitting and regularly reviewing beneficiary nominations can increase the likelihood that pension benefits are distributed in line with your wishes.

While pension providers may still consider a spouse or other dependents where no beneficiary nomination has been made, maintaining an up-to-date nomination form provides greater clarity regarding your wishes and may help simplify the decision-making process following your death.

This becomes especially important for expatriates whose family circumstances, residency status or succession objectives may change over time.

While pension scheme administrators often retain discretion over the payment of death benefits, they will usually take the member’s wishes into account when making their decision.

Coordinating Retirement Withdrawals

Retirement income planning can be just as important as pension accumulation.

Where spouses have different income levels, tax residency positions or sources of retirement income, coordinating pension withdrawals may help improve overall household tax efficiency.

For example, if one spouse has significantly lower taxable income, it may be more efficient for that spouse to draw pension income first, depending on the tax rules that apply.

For expatriate couples, these decisions often require consideration of both UK pension legislation and the tax treatment of pension income in their country of residence.

Can Your Spouse Inherit an International SIPP?

In many cases, yes. If your spouse is nominated as a beneficiary, they may be able to inherit pension assets following your death and continue holding those assets within a beneficiary pension arrangement, subject to the scheme rules and applicable legislation.

For many expat couples, this is the most important exception to the general rule that a SIPP cannot be transferred to a spouse during the member’s lifetime.

When a SIPP holder dies, any remaining pension assets can usually be paid to nominated beneficiaries. A surviving spouse is often the primary beneficiary, although the final outcome depends on the scheme rules and the provider’s decision-making process.

Depending on the circumstances, death benefits may be paid in several ways.

Lump-Sum Payment

The pension provider may distribute the death benefits as a lump sum directly to the beneficiary.

This may provide immediate access to the funds but could have different tax implications depending on the beneficiary’s circumstances and country of residence.

Beneficiary Drawdown

Many modern pension arrangements allow a surviving spouse to retain inherited pension assets within a beneficiary drawdown arrangement.

The funds remain invested and the beneficiary can decide how and when withdrawals are taken, subject to the applicable rules.

For expatriate families, beneficiary drawdown can offer additional flexibility where retirement income needs, tax residency and long-term financial objectives may continue to evolve.

Beneficiary Annuity

In some cases, a surviving spouse may choose to use inherited pension assets to purchase an annuity.

This can provide a guaranteed income stream, although the suitability of an annuity will depend on personal circumstances and retirement objectives.

Taxation of SIPP Death Benefits

The tax treatment of pension death benefits depends on several factors, including the age of the pension holder at death, the type of benefits paid and the beneficiary’s tax position.

Cross-Border Tax Considerations

For expats, the UK tax position is only part of the picture.

Additional tax liabilities may arise depending on how pension death benefits are treated in the beneficiary’s country of residence.

Where both spouses live outside the UK, it is important to remember that an International SIPP remains a UK pension arrangement even though both the member and beneficiary may be overseas.

While UK pension legislation continues to govern the pension itself, local taxation rules, reporting obligations and applicable double taxation agreements may also influence the overall outcome.

For example, a surviving spouse living in Spain, Portugal or another overseas jurisdiction may face a different local tax treatment on inherited pension income even where little or no UK income tax is payable.

As a result, pension death-benefit planning should generally be considered alongside wider cross-border tax and estate-planning arrangements.

Upcoming Pension IHT Changes in the UK

The UK government has legislated changes to the inheritance tax treatment of pension assets that are due to take effect from 6 April 2027.

Under reforms currently scheduled to take effect from April 2027, most unused pension funds and certain death benefits may be brought within the scope of UK inheritance tax. This represents a significant change to the way defined contribution pensions, including SIPPs, have traditionally been used within estate planning strategies.

Once these changes take effect, they may alter the way pensions are used within long-term estate-planning strategies. Depending on an individual’s circumstances, pension assets may form part of the value considered when assessing potential inheritance tax liabilities.

For expat couples, the reforms may increase the importance of reviewing:

• Beneficiary nominations
• Pension withdrawal strategies
• Estate-planning arrangements
• Succession-planning objectives

Where pension assets become more exposed to inheritance tax, families may wish to reconsider how pension wealth fits within their broader wealth-transfer strategy.

For deaths occurring from 6 April 2025 onwards, inheritance tax exposure may also depend on the UK’s long-term residence rules rather than solely on an individual’s current country of residence.

This is particularly relevant for expatriates because residency, domicile and long-term residence concepts do not always align with one another.

Reviewing pension arrangements periodically can help ensure they remain aligned with changing legislation, family circumstances and residency positions. This may be especially important for expats holding UK pension assets, such as SIPPs, as they consider how UK-based pensions fit within broader cross-border wealth-planning arrangements.

In some situations, relief under double tax treaties or other provisions may help mitigate overlapping tax liabilities. However, the availability of relief depends on the jurisdictions involved and the applicable legislation.