RPSM13100420 - Technical Pages: International: Enhancement: Recognised overseas scheme transfer factor: Post 5 April 2005 transfers

Transfers after 5 April 2006

If after 5 April 2006 there is a recognised overseas scheme transfer of an individual's rights from an arrangement under a recognised overseas pension scheme to an arrangement under a registered pension scheme the individual's lifetime allowance may, on notification to HMRC, be enhanced by a factor which is called a recognised overseas scheme transfer factor.

The recognised overseas scheme transfer factor is calculated by dividing the amount of any sums and assets transferred by the standard lifetime allowance as at the date of the transfer. But if contributions made by or in respect of an individual to, or their accrual of benefits under, the overseas arrangement after 5 April 2006 received UK tax relief the amount transferred has to be reduced by the relevant relievable amount (see RPSM13100490).

The deduction of the relevant relievable amount ensures broadly that the enhancement does not include amounts transferred into the registered pension scheme that have benefited from UK tax relief after 5 April 2006 (for example because the individual has had migrant member relief on contributions to the overseas scheme). The relevant relievable amount relates to any part of the period during which the individual was an active member of the recognised overseas pension scheme and was not a relevant overseas individual.