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17 January 2018

Charge on overseas pension transfers

A new overseas transfer charge was announced in the Spring Budget 2017 and became effective on 9 March 2017.

It applies to transfers to QROPS (a pension scheme based outside of the UK, but which is similar to a UK registered pension scheme) which were instructed to go ahead on or after 9 March 2017. However, there are some exceptions.

The charge does not apply if:

  • You’re resident in the country where the QROPS was established; or
  • You’re resident in a country in the European Economic Area (EEA), and the QROPS was also established in a country within the EEA; or
  • You’re an employee of an international organisation and the QROPS was set up by that organisation to provide benefits for, or in respect of, past service of employees; or
  • The QROPS is an overseas public service pension scheme and your employer participates in it; or
  • The QROPS is an occupational pension scheme and your employer is a sponsoring employer of it.












If your circumstances change within the next five years…
The overseas transfer charge can be applied (or reclaimed) retrospectively if your circumstances in relation to the criteria change within five full tax years of your transfer.

Unauthorised payment charges
Any transfers to pension schemes outside of the UK which are not registered, or not QROPS, will face a charge of at least 40% as the transfer is deemed ‘unauthorised’.

 

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