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The Relevant Overseas Schemes (Transfer of Sums and Assets) Regulations 2018

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Citation and commencement

1.  These Regulations may be cited as the Relevant Overseas Schemes (Transfer of Sums and Assets) Regulations 2018 and come into force on 6th April 2018.

Interpretation

2.  In these Regulations “Part”, “section” or “Schedule”, without more, means a Part, section or Schedule of the Finance Act 2004.

Relevant overseas transfer

3.—(1) Paragraph 2 applies where there is a transfer within section 169(7B) (relevant overseas transfer) of sums or assets which, if the relevant overseas scheme were a registered pension scheme, would represent—

(a)rights in respect of a scheme pension to which a member of that relevant overseas pension scheme(1) has become entitled (“the original pension”) and those sums and assets are, after the transfer, applied towards the provision of a scheme pension (“the new pension”), or

(b)a member’s flexi-access drawdown fund (“the original pension”) or a member’s drawdown pension fund (“the original pension”) under that relevant overseas scheme, which, after the transfer, is designated as available for payment of a drawdown pension (“the new pension”) or applied towards the provision of a scheme pension (“the new pension”).

(2) The new pension is to be treated as if it were the original pension for the purposes of Part 4 prescribed in the table.

Prescribed Purposes — relevant overseas transfer

ProvisionPurpose
Paragraph 2A(3) and (5) of Schedule 28(2) (unauthorised payments)

To determine—

(i)

the rate payable when the member became entitled to the pension, and

(ii)

the amount of any lump sum on which there is no liability to tax to which the member became entitled in conjunction with the pension,

  • by reference to the original pension.

Paragraph 8 of Schedule 28(3) (member’s drawdown pension fund)To determine whether the member’s funds are newly designated funds to prevent the funds becoming newly designated funds as a result of the transfer.
Paragraph 1(1) and (3)(a) of Schedule 29(4) (pension commencement lump sum)To determine whether the member has become entitled to a lump sum in connection with the member becoming entitled to the new pension by reference to the original pension (to prevent a lump sum to which a member becomes entitled in connection with becoming entitled to the new pension being a pension commencement lump sum).
Paragraph 14(3) of Schedule 29(5) (pension protection lump sum death benefit)

To determine—

(i)

the amount crystallised by reason of the member becoming entitled to the pension (AC) by reference to the member becoming entitled to the original pension,

(ii)

the amount of the pension paid (AP) as that paid in respect of the original pension and the new pension in respect of the period between the member becoming entitled to the original pension and the member’s death, and

(iii)

the total amount of the pension protection lump sum death benefit (TPLS) by reference to that paid in respect of the original pension and the new pension.

Paragraph 16(3) of Schedule 29(6) (annuity protection lump sum death benefit)

To determine—

(i)

the amount crystallised by reason of the member becoming entitled to the pension (AC) by reference to the member becoming entitled to the original pension,

(ii)

the amount paid (AP) as that paid in respect of the original pension and the new pension in respect of the period between the member becoming entitled to the original pension and the member’s death, and

(iii)

the total amount of the annuity protection lump sum death benefit (TPLS) by reference to that paid in respect of the original pension and the new pension.

Term and reduction in the rate of new pension

4.—(1) In the case of a new pension treated as the original pension by virtue of regulation 3(2) a reduction of that pension is a prescribed circumstance for the purposes of paragraph 2(4) of Schedule 28(7) (scheme pension) if—

(a)the rate of the pension payable under the new pension on the day on which the member becomes entitled to it is not less than the rate payable under the original pension immediately before the original pension ceased to be payable, save to the extent that any reduction reflects reasonable administration costs of the transfer of sums or assets, and

(b)where the new pension is payable until the later of the member’s death and the end of a term certain, that term ends before the date on which the term certain under the original pension would have ended.

(2) In paragraph (1)(a) “administration costs” includes the payment of wages, salaries or fees to persons engaged in administering the pension scheme.

Justin Holliday

Melissa Tatton

Two of the Commissioners for Her Majesty’s Revenue and Customs

14th March 2018

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