RPSM13101045 - Technical pages: International: Migrant member relief: Retention of relief where UK resident individual joins new scheme

Circumstances in which entitlement to migrant member relief is retained where an individual joins a qualifying overseas pension scheme whilst UK resident

[The Registered Pension Schemes (Extension of Migrant Member Relief) Regulations 2006 - SI 2006/1957]

The Registered Pension Schemes (Extension of Migrant Member Relief) Regulations 2006- extend eligibility for migrant member relief where an individual is not tax resident in the UK at the time they join a qualifying overseas pension scheme other than the scheme referred to in conditions a, b and c at RPSM13101040. They specify three circumstances in each of which the meaning of “the scheme” in conditions a, b, and c can include a transferor scheme, or the original scheme, where an individual has to become a member of another qualifying overseas pension scheme.

The first circumstance is that there has been a block transfer on or after 6 April 2006 from the qualifying overseas pension scheme of which the individual was a member to the receiving qualifying overseas pension scheme. In that case the transferor scheme or the receiving scheme can be “the scheme” for the purposes of conditions a, b and c.

The second circumstance is that there has been a series of block transfers from one qualifying overseas pension scheme to another and the last of those transfers was made to the receiving qualifying overseas pension scheme on or after 6 April 2006. In that case any of the transferor schemes or the receiving scheme can be “the scheme” for the purposes of conditions a, b and c.

The third circumstance is that

• under the rules of a qualifying overseas pension scheme (“the original scheme”) on and after a specified date it is no longer possible for further accruals to occur;
• a further qualifying overseas pension scheme (“the new scheme“) has been established to provide benefits in respect of rights accruing to members of the original scheme after the specified date,
• more than one member of the original scheme has become a member of the new scheme in relation to all rights accruing after the specified date,
• rights do not accrue to any member of the new scheme after the specified date under the original scheme.

In that case the original scheme or the new scheme can be the “the scheme” for the purposes of conditions a, b and c.

This means broadly that an individual’s entitlement to migrant member relief is preserved where

• pension rights are compulsorily transferred to a different qualifying overseas pension scheme as part of a company take-over or reorganisation, or
• an existing scheme is closed to new accruals and consequently members are obliged to join a new, additional, qualifying overseas pension scheme in which their pension rights will be accrued thereafter.