Section 53: Overseas Pension Schemes: General
Summary
1.Section 53 makes changes to the provisions for qualifying recognised overseas pension schemes (QROPS) in Part 4 of Finance Act 2004. The changes enable HM Revenue & Customs (HMRC) to require overseas pension schemes to provide information which is necessary to ensure the proper operation of the legislation relating to QROPS. In addition there are some new rules about when a pension scheme may be excluded from being a QROPS.
Details of the Section
2.Subsection 1 amends section 150 of Finance Act 2004 to clarify the power to make regulations setting out conditions that apply to a “recognised overseas pension scheme”.
3.Subsection 4 substitutes a new section 169(4) of Finance Act 2004 and introduces new sections 169(4A) and (4B). These provisions contain powers enabling HMRC to make regulations setting out information requirements; enable HMRC to require additional information from a new or existing QROPS; allow HMRC to obtain information from a pension scheme that has been a QROPS; and provide a power to apply the penalties set out in Part 7 of Schedule 36 to the Finance Act 2008 to a failure by a former QROPS to comply with the new information requirements.
4.Subsection 5 substitutes a new section 169(5)(a) of Finance Act 2004 to set out the circumstances in which it can be appropriate for a pension scheme to be excluded from being a QROPS.
5.Subsection 7 defines certain terms used in subsections (4) to (6), in particular “relevant requirement” which includes a requirement imposed under Part 1 of Schedule 36 to the Finance Act 2008. Information requirements mentioned in paragraph 14 of this note include a requirement imposed under that Part.
Background
6.The UK allows pension savings that have received UK tax relief to be transferred free of UK tax to overseas pension schemes, providing they are within an individual’s lifetime allowance.
7.Pension schemes established outside the UK must meet statutory requirements set out in the Pension Schemes (Categories of Country and Requirements for Overseas Pension Schemes and Recognised Overseas Pension Schemes) Regulations 2006 before they are able to receive these tax-free transfers. Pension schemes that meet these requirements are known as qualifying recognised overseas pension schemes (QROPS).
8.In Budget 2012 the Chancellor announced changes to strengthen reporting requirements and powers of exclusion relating to QROPS to support changes made by secondary legislation on 6 April 2012 and 25 May 2012.
