HMRC have decided to temporarily suspend the published list of Recognised Overseas Pension Schemes (“ROPS”). They will publish an updated list on 1 July 2015. They state that they are now aware that there are pension schemes that have appeared on previous lists that do not meet the Pension Age Test, one of the requirements to be a ROPS. Pension schemes established in countries that can be required to make payments before age 55 in circumstances other than ill health will not be able to meet the Pension Age Test if the scheme allows the member to receive transfers before age 55.
Schemes that do not meet the requirements to be a ROPS cannot be a Qualifying Recognised Overseas Pension Scheme (“QROPS)”. HMRC state that if a scheme has ceased to be a QROPS, individuals who transferred their pension savings to that pension scheme before it ceased to be a QROPS will be subject to UK tax on the same basis as if the scheme had remained a QROPS. They will be able to remain as members and receive a pension paid from the sums transferred without automatically incurring additional UK charges.
HMRC do not, however, state what will happen in cases where individuals who transferred their pension savings to a scheme that has ceased to be a QROPS did so prior after such a scheme ceased to be a QROPS but before it was removed from the published list of ROPS. HMRC may therefore seek to raise assessments of 55% of the pension savings transferred in such cases.
This article appears in the JHA June 2015 Tax Newsletter, which also features:
