RPSM11104860 - Technical Pages: Lifetime allowance: Valuing benefits on BCEs: Transfer to a qualifying recognised overseas pension scheme – BCE 8

Transfer to a qualifying recognised overseas pension scheme (BCE 8)

The eighth BCE occurs when a member transfers funds from a registered pension scheme to a qualifying recognised overseas pension scheme. This event catches transfers overseas from all types of arrangement.

RPSM14101020 to RPSM14101070 gives more information on the transfer of benefits overseas.

Effective date of event

The effective date of the event is the date the assets/funds leave the scheme (not when they are received overseas).

The date a transfer can be said to leave a scheme is a legal question. It will be the point when a clear agreement is in place (including the completion of any transfer application and acceptance process) such that both schemes accept that the beneficial or equitable interest under the registered pension scheme has been transferred.

The fact that the conveyance of any legal title to any assets being transferred may stray does not alter the above. This follows an understanding of law that it is not necessary to complete the formalities of transferring the legal title to an asset to convey the underlying beneficial interest. As a test of effectiveness, it should be considered that if the member died on a particular date would death benefits be payable from the transferring registered pension scheme.

Amount crystallising

The amount crystallising at the BCE is the total of

• any money transferred from the scheme, and
• the market value of any assets similarly transferred.

Where a chargeable amount arises, any lifetime allowance charge paid by the scheme administrator effectively forms part of that chargeable amount. The amount crystallising through BCE 8 will be the actual amount paid as a transfer value, i.e. less any deduction made by the scheme administrator to cover any lifetime allowance charge due.

The chargeable amount will be what crystallises (net) through BCE 8 (and any other BCE), over and above the member’s available lifetime allowance, plus the charge paid by the scheme administrator. RPSM11105220 explains why this is and gives more detail.

Transfer of assets used to secure the entitlement to an unsecured pension that arose before 6 April 2006

There will be no BCE8 in respect of so much of the transfer from an unsecured pension fund that represents unsecured pension in payment on 5 April 2006 (see RPSM09102110).