RPSM13101010 - Technical Pages: International: Migrant member relief: Basic principles

Basic principles

After 5 April 2006 Schedule 33 provides relief from UK income tax on contributions made to an overseas pension scheme where an individual has come to the UK as an existing member of that scheme if certain conditions are met. This is referred to as migrant member relief. It replaces "corresponding relief".

Individuals can receive relief on contributions made by them or on their behalf, and on contributions made in respect of them by their employer, as if the contributions to the overseas pension scheme were made to a UK registered pension scheme (see RPSM13101020). Schedule 33 also provides that employers may claim a deduction for contributions made to an overseas pension scheme in respect of employees who are eligible for migrant member relief (see RPSM13101030).

Under Schedule 34 the lifetime allowance and annual allowance provisions will apply in respect of contributions to overseas pension schemes that have received migrant member relief. Member payment charges can also apply to certain payments from overseas schemes to UK tax resident, and recently tax resident, individuals out of funds relating to contributions that have received migrant member relief. This is in line with the treatment of such payments from a UK registered pension scheme. Those provisions are explained at RPSM13102000 onwards.