Back to News | 21 March 2017
The British government proposes material changes in relation to Qualifying Recognised Overseas Pension Schemes (QROPS).
They were announced by the Chancellor of the Exchequer, Philip Hammond, in the first full Budget on 8 March 2017.
In a policy document, the government explained that it will legislate in the Finance Bill 2017 to apply a 25% tax charge to pension transfers made to QROPS except where limited exemptions apply in order to tackle abuse of foreign pension schemes. This charge applies immediately to transfers requested on or after 9 March 2017.
Transfers to QROPS may still be made tax-free where people have "a genuine need to transfer their pensions", including where the individual and the pension scheme are both located within the European Economic Area (EEA), the individual and the scheme are in the same country or the QROPS is provided by the individual's employer. According to HMRC policy papers, if the individual's circumstances change within five tax years of the transfer, the tax treatment of the transfer will be reconsidered (i.e. the tax charge may be imposed retrospectively).
Further information is contained in new (and quite detailed) HMRC guidance published on 8 March 2017.