In a move that appears to be aimed at stopping UK retirement monies being parked in third countries like New Zealand, new rules have been announced to apply to transfers requested on or after 9th March, 25% tax will apply on the transfer unless certain conditions are met. The charge will be made before the transfer is made. The conditions include:
- The individual and the QROPS fund are in the same country after the transfer; or
- A fund in a European Economic Area country. The Isle of Man is not an EEA country but Gibraltar is; or
- If the QROPS is an occupational pension scheme sponsored by the individual’s employer.
This is in addition to the rule changes details in an earlier blog.
It is important for those Australian QROPS funds on the HMRC ROPS list that they return by post the APSS240 form to arrive by 13th April, 2017. If this is not done, the fund will be deleted from the list. For new applications, there is a new APSS251 form that should be used. Basically, the scheme manager of the receiving fund acknowledges that they are jointly and severally liable with the member for tax charges, and they confirm that with any requirement to deduct and/or pay tax charges to HMRC. The form cannot be emailed.
The good news is that from 7th April, 2017 the requirement that non-UE ROPS must allocate 70% of funds to provide a member with an income for life is removed. This will allow such ROPS to offer flexible access to pensions in line with UK pension freedoms introduced in April 2015.