If you pay tax in the UK and pay contributions to an overseas pension scheme you could be entitled to tax relief. This guide explains how you qualify for relief and how to claim relief on contributions to an overseas pension scheme.
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Tax relief may be given to:
There are three types of tax relief:
Tax relief on member contributions is limited to the same amount a member of a UK pension scheme can get.
Tax relief on employer contributions to an overseas pension scheme is given on the same basis as employer contributions to a registered pension scheme.
If you've come from overseas to work in the UK you can get tax relief on contributions made to a pension scheme set up outside the UK if both of the following apply:
To qualify for this relief your pension scheme must be an overseas pension scheme that meets certain qualifying conditions. If you don't know if your scheme is a 'qualifying overseas pension scheme' (QOPS) you should ask your pension scheme manager or financial adviser.
The following must also apply:
If you had Corresponding Relief in 2005-06 for contributions to an overseas pension scheme you can continue to get this relief on contributions in later years providing all the following conditions are met:
If you no longer qualify to get relief under the Transitional Corresponding Relief rules you may still be able to qualify for tax relief under the Migrant Member Relief rules.
If you complete Self Assessment tax returns you'll have to claim tax relief through your return. If you don't complete tax returns or you don't want to wait until the end of the tax year to get tax relief you can make a claim to HMRC.
If your employer has agreed with HMRC to operate a modified PAYE agreement for their 'tax equalised' employees, you'll be getting tax relief when the contributions are made. You don't need to claim tax relief during the tax year. You'll still need to claim relief on your tax return as your relief using the modified PAYE agreement will be an amount estimated by your employer. Ask your employer if you're not sure if they operate a modified PAYE agreement.
If your employer doesn't operate a modified PAYE arrangement you'll need to make an in-year claim so that your tax code is changed to give you tax relief.
If you complete Self Assessment tax returns you'll need to claim relief under the 'Paying into registered pension schemes and overseas pension schemes' section. You should do this even if:
See form SA150 Tax Return Guide for guidance on completion.
The following payments can be subject to UK tax:
Tax on these payments will only be due if you're UK resident at the time of the payment, earlier in the same tax year or in any of the five previous tax years.
The exception to this rule is if the unauthorised payment was due to investment in taxable property.
The annual allowance and lifetime allowance rules apply to pension savings in the overseas pension scheme that qualifies for UK tax relief whether or not the member is UK resident.