UK Pensions/QROPS 5 year+ rule to become 10 year+ rule

[Andrew from Vista Financial]

HMRC are consulting on changes to the time period that a member payment charge applies for unauthorised payments from Relevant Non UK Schemes (RNUKS - this would include an Australian QROPS (former QROPS)) which if approved will come into effect from April 2017.

 

Without doubt great care should be taken when considering transferring or withdrawing benefits from a QROPS (former QROPS).

 

Here are the proposals:

 

Currently UK tax can arise on payments, including deemed payments, made from a foreign pension scheme that has had UK tax relief (a relevant non-UK scheme) under the following provisions:

 

· the member payment charges under Schedule 34 Finance Act 2004

 

· the taxable property charges under Schedule 34 Finance Act 2004

 

The member payment charges

 

Certain payments from a relevant non-UK scheme (RNUKS) are taxable if the member is UK resident when the payment is made or has been UK resident in any one of the previous five tax years.

 

Guidance on the definition of an RNUKS and when UK tax charges apply can be found in the Pensions Tax Manual at PTM113210.

 

The time limit during which the member payment provisions apply will be extended so that the member payment charges will apply if, at the time of the payment, the member is UK resident or has been resident in any one of the previous 10 tax years.

 

The extended time limit will apply to:

 

· transfers made from a registered pension scheme on or after 6 April 2017

 

· pension inputs into an overseas scheme on or after 6 April 2017 that have benefitted from UK tax relief.

Edited December 6, 2016 by Andrew from Vista Financial

[acb]

Hi Andy

just trying to understand the implications   of this consultation .

I have just returned to OZ in feb 2019 and have just started to receive a uk  nhs  pension in oct 2019

I am dual national and having  worked in Australia in the past and have accumulated a Q super fund 

which I hope to access next year  on or after my 60 th birthday on a tax free basis .

I am intending to top the q super with some  proceeds of our house sale whilst staying within the relevant limits ,

although I also have a lump sum from the Uk  which I could consider using .

Do I have to worry about HMRC chasing my oz super income when I access it from Australia.

thanks Acb

 

[Andrew from Vista Financial]

Hi Acb

This post was about transfers (rollovers) of UK pensions to Australian Super Funds and the HMRC rules surrounding this when accessing any of those transferred monies under the Qualifying Recognised Overseas Pensions (QROPS) regime.

This does not relate to the NHS Pension payments or QSuper Fund.

So essentially no implications to you in this regard.

ATB

Andy