RPSM13101060 - Technical Pages: International: Migrant member relief: Definition of qualifying overseas pension scheme

Definition of a qualifying overseas pension scheme

[s150(7) & para 5(1), Sch 33 and the Pension Schemes (Category of Country and Requirements for Overseas Pension Schemes) Regulations 2006 - SI 2006/206 and the Pension Schemes (Information Requirements - Qualifying Recognised Overseas Pension Schemes and Corresponding Relief) Regulations 2006 - SI 2006/208] 

A qualifying overseas pension scheme has to be an overseas pension scheme under section 150(7) and The Pension Schemes (Categories of Country and Requirements for Overseas Pension Schemes and Recognised Overseas Pension Schemes) Regulations 2006 (SI 2006/206). It also has to meet certain qualifying conditions under paragraph 5 of schedule 33 and The Pension Schemes (Information Requirements - Qualifying Overseas Pension Schemes, Qualifying Recognised Overseas Pension Schemes and Corresponding Relief) Regulations 2006 (SI 2006/208).

RPSM13101070 sets out what is an overseas pension scheme.

In order for an overseas pension scheme to be a qualifying overseas pension scheme the scheme manager must have met all of the following conditions:

• they have notified HMRC that it is an overseas pension scheme and, if required, have provided supporting documentation. If documentation is required HMRC would normally ask for a copy of the letter of tax approval or a letter from the tax authority confirming that status. But if the country in which the scheme is established does not have a system of tax approval then a letter from the tax authority confirming that the scheme is resident there and a copy of the scheme's rules may be required instead.
• they have undertaken to notify HMRC if it ceases to be an overseas pension scheme and
• they have undertaken to provide to HMRC, by 31 January next following the end of the tax year in which the benefit crystallisation event occurs, the following information:

1. 1. the name and address of any relevant migrant member in respect of whom there has been a benefit crystallisation event in the tax year;
   2. the date, amount and nature of the benefit crystallisation event.

In addition the overseas pension scheme must not have been excluded from being a qualifying overseas pension scheme (RPSM13101090 refers).

A scheme manager must send the requisite notification and undertakings to

A form (PS 250) has been designed which can be used by a scheme manager to provide notification.

A scheme member, or their financial adviser, will be able to check with HMRC whether or not the scheme has met those conditions by writing to Pension Scheme Services.

Where the benefit crystallisation event referred to in condition 3 is the payment of a pension the specified information has to be submitted to HMRC only once, in respect of the first payment.

In certain circumstances the deadline for submitting information can be earlier than the date referred to in condition 3. An officer of HMRC can notify the scheme that the information has to be provided within 30 days of the issue of that notice if the officer has reasonable grounds for believing that the scheme:

• has failed, or may fail, to comply with any of the requirements imposed upon it, and
• such failure is likely to have led, or to lead, to serious prejudice to the proper assessment or collection of tax.