HM Revenue & Customs (HMRC) has announced that qualifying recognised overseas pension schemes (Qrops) transfers for individuals not in the European Economic Area (EAA) will be hit with a 25% tax charge. This policy will hand the Treasury £60 million a year by 2021/22, the government said.
It makes you wonder if perhaps you have been missing something all these years – a gaping loophole in pension regulation has now been closed.
For transfers requested on or after 9 March, transfers to Qrops will be subjected to a 25% tax charge unless certain conditions apply. This charge will be made before the transfer is made.
These conditions allowable include
Payments out of funds transferred to a Qrops on or after 6 April 2017 will be subject to UK tax rules for five tax years after the date of transfer, regardless of where the individual is resident,’ HMRC added.
There are generally between 10,000 and 20,000 transfers to Qrops each year. It is expected that only a minority of these transfers will be subject to this policy,’ HMRC said.
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