Pension tax for overseas pensions
12 December 2016
Draft legislation has been published which sets out the changes to the conditions to be an ‘overseas pension scheme’ and a ‘recognised overseas pension scheme’.
Geographical extent – the changes extend to all four nations of the UK.
As previously announced, the government is consulting on changes to the pension tax rules for qualifying overseas pension schemes and qualifying recognised overseas pension schemes (QROPS).
Transfers of pension savings that have had UK tax relief can be made free of UK tax (up to the lifetime limit on tax-relieved pension savings) to overseas pension schemes that meet the conditions to be a qualifying overseas pension scheme (QOPS) qualifying recognised overseas pension schemes (QROPS).
The 2006 Regulations set out the conditions to be an ‘overseas pension scheme’ that a scheme must meet to be a QOPS and the conditions to be a ‘recognised overseas pension scheme’ that a scheme must meet in order to be a QROPS.
The draft legislation (The Pension Schemes (categories of country and requirements for overseas pension schemes and recognised overseas pension schemes) (Amendments) Regulations 2017) amends those conditions so that it is no longer a requirement for any schemes to designate 70% of funds that have received UK tax relief to provide the individual with an income for life in order to be a QOPS or a QROPS.
If you would like to comment on these drafts, please send responses via email to [email protected] by 1 February 2017.