A QROPS is an overseas pension scheme that meets certain requirements set by HM Revenue & Customs and must have a beneficial owner and trustees, and it can receive transfers of UK Pension Benefits.
Those affected will be UK and QROPS pension scheme administrators and pension scheme members who are considering moving funds from a UK registered pension scheme.
The charge is aimed at those seeking to reduce the tax payable by moving their pension wealth to another jurisdiction – that is unless both the individual and the pension savings are in the same country, both are within the EEA, or the QROPS is provided by the individual’s employer. The tax charge will apply if, within five years, the transfer no longer qualifies. When the tax charge is made, it will be deducted before the transfer by the scheme administrator or scheme manager of the pension scheme making the transfer.
Exceptions apply to the charge, allowing transfers to be made tax-free where people have a genuine need to transfer their pension, including when the individual and the pension are both located within the European Economic Area or the QROPS is provided by the individual’s employer.
The Government said this charge supports its objective of promoting fairness in the tax system, and it continues to allow overseas transfers from pension schemes that have had UK tax relief that are made when people leave the UK and take their pension savings with them. The Government expects to raise £315m through the regime by 2021/22.
Content of the articles featured in this publication is for your general information and use only and is not intended to address your particular requirements or constitute a full and authoritative statement of the law. They should not be relied upon in their entirety and shall not be deemed to be, or constitute advice. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of any articles.For more information please visit www.goldminemedia.co.uk