RPSM05101210 - Technical Pages: Contributions and tax relief: Member contributions: Entitlement to tax relief: International aspects

International aspects

Corresponding relief

From 2006/07 onwards ‘migrant member relief’ replaces ‘corresponding relief’ as the means by which mobile individuals may get UK tax relief against their relevant UK earnings in respect of contributions to certain foreign pension schemes. Many individuals eligible for corresponding relief will also be eligible for migrant member relief. However, there is also a transitional provision to ensure that an individual who received tax relief under the corresponding relief provisions in the tax year 2005/06 can continue to receive tax relief in the tax year 2006/07 onwards if the scheme manager reports certain prescribed benefit information to HMRC. More information can be found at RPSM13101110.

Migrant member relief

[Paras 1, 4 & 5 Sch 33] [Reg 2, The Pension Schemes (Relevant Migrant Members) Regulations 2006-[SI 2006/212]

Individuals who are members of an overseas pension scheme may claim tax relief on contributions to that scheme if they meet all of the criteria for migrant member relief. These are

• The member is resident in the UK when the contribution was made, and
• The member has relevant UK earnings chargeable to UK tax, and
• The contribution is paid to a qualifying overseas pension scheme, and
• The member was a member of the qualifying overseas pension scheme before they became resident in the UK, and continued to be a member of that scheme when they became resident in the UK and made contributions to that scheme, and
• the member was at any time in the 10 years before the beginning of residence in the UK entitled to tax relief in respect of contributions to the scheme under the law of the country or territory in which the member was then resident, and
• The scheme manager has notified the member that they will advise HMRC of any benefit crystallisation events in respect of that member.
• The member has notified the scheme manager of an intention to claim relief.

If these conditions are met relief on contributions is due under section 188 and the limit on tax relief as per section 190 applies (see RPSM05101120). Further information on migrant member relief can be found at RPSM13101000.