- EU administered pensions and bankruptcy in UK—exclusion of pension rights from the bankrupt’s estate
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
- Case details
Pensions analysis: On a preliminary reference from the High Court, the Court of Justice has ruled that section 11 of the Welfare Reform and Pensions Act 1999 (WRPA 1999) is likely to be indirectly discriminatory in relation to nationals of other Member States in that it contravenes Article 49 TFEU (prohibiting restrictions on the freedom of establishment). Section 11 makes the automatic exclusion from the bankrupt’s estate of pension rights dependent on the requirement that at the time of bankruptcy the pension scheme be tax approved in that Member State (the UK). This requirement is discriminatory because it is also imposed in a situation where an EU citizen who, prior to becoming bankrupt moved to that Member State for the purpose of pursuing a self-employed activity there, has pension rights accrued under a pension scheme established and tax approved in his home Member State. The requirement is only not discriminatory if the restriction on freedom of establishment constituted by the national provision is justified by an overriding reason in the public interest and is appropriate for the attainment of the objective pursued. Written by John Briggs, barrister, South Square Chambers.
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