RPSM13102130 - Technical Pages: International: Application of charges to non-UK schemes: Member payment charges and taxable property unauthorised payment charge: Relevant non-UK schemes
Relevant non-UK schemes
[Para 1(5), 1(6) & 20, Schedule 34][SI 2006/207][Para 51 of Schedule 36 & The Taxation of Pension Schemes (Transitional Provisions) Order 2006 -SI 2006/572]
A scheme is a relevant non-UK scheme if it is not a registered pension scheme and if one or more of the following conditions is met:
- contributions made to the scheme after 5 April 2006 by or on behalf of a member, or by an employer in respect of them, have received relief by virtue of schedule 33 (RPSM13101000 refers). That includes contributions that have received migrant member relief and employer contributions in respect of which an employee is tax-exempt under section 308A ITEPA 2003. It also includes contributions that have received transitional corresponding relief under paragraph 51 of schedule 36 or under Articles 15-17 of the Taxation of Pension Schemes (Transitional Provisions) Order 2006 (RPSM13101100 refers).
- contributions made to the scheme after 5 April 2006 by or on behalf of a member, or by an employer in respect of them, have received tax relief under a double taxation arrangement. A double taxation arrangement means an agreement between the UK and any territory outside the UK as set out in section 788 ICTA 1988.
- any member of the scheme has been exempt from liability to tax by virtue of section 307 ITEPA 2003 in respect of provision for retirement or death benefits made by the employer after 5 April 2006 when the scheme was an overseas pension scheme (RPSM13101070 refers), or
- there has been a relevant transfer to the scheme at any time after 5 April 2006 when it was a qualifying recognised overseas pension scheme (RPSM14101050 refers).
So far as c above is concerned, as indicated in the Employment Income Manual at EIM20030, section 307 ITEPA 2003 would exempt from charge as earnings under the benefits code any expense incurred by the employer for the employee in respect of a pension. This means that if the employer incurs costs in providing for the employee’s pension, and the employee is therefore exempted from a tax charge by section 307, the employee would be covered by schedule 34 in respect of that provision. But if the employer does not incur any costs section 307 would not apply and consequentially neither would schedule 34.
In d above a relevant transfer is a transfer made directly or indirectly into a member's arrangement under a relevant non-UK scheme (RPSM14101070 refers) of funds representing accrued rights under a registered pension scheme or, in certain circumstances, a transfer from another relevant non-UK scheme.
An indirect transfer can occur where an individual's funds are transferred to a relevant non-UK scheme from another relevant non-UK scheme and those funds had previously been transferred by the individual from a registered pension scheme.
An indirect transfer can also occur if the country in which the transferring and receiving relevant non-UK schemes are established and regulated permits funds to be transferred, or rolled over, into such a pension scheme from another via the individual whose rights are being transferred and if the conditions associated with such a transfer are met. It is possible for such a transfer to be made between certain US qualified retirement plans.