RPSM13100410 - Technical Pages: International: Enhancement: Recognised overseas scheme transfer factor

Overview

Where there is a benefit crystallisation event a member of a registered pension scheme must count the value of all of those crystallised benefits against their unused lifetime allowance in order to determine whether or not a lifetime allowance charge arises.

Sections 224-226 provide for an individual's lifetime allowance to be enhanced where a recognised overseas scheme transfer of pension rights that is, a transfer to a registered pension scheme from a recognised overseas pension scheme ( RPSM14103020 refers) is made after 5 April 2006 but before the benefit crystallisation event. That broadly offsets the benefits relating to the sums and assets transferred from a pension scheme in an overseas country and prevents them giving rise to a lifetime allowance charge.

It recognises that those sums and assets are likely to have been built up without UK tax relief. However, that will not always be the case. So sections 224-226 restrict the enhancement of the individual's lifetime allowance in such circumstances.