RPSM13102020 - Technical Pages: International: Application of charges to non-UK schemes: Basic principles
[Sch 34][The Pension Schemes (Application of UK Provisions to Relevant Non UK-Schemes) Regulations 2006 - SI 2006/207]
Schedule 34 provides for certain charging provisions in Part 4 of the Finance Act 2004 to apply in certain circumstances to members of non-UK pension schemes that are not registered pension schemes.
This is necessary because there are circumstances in which an overseas pension scheme that is not a registered pension scheme will contain funds that have benefited from UK tax relief. For example, where a migrant individual comes to the UK as a member of an overseas pension scheme, any subsequent contributions to their overseas scheme may benefit from UK tax relief just like contributions to a registered pension scheme. Also, funds in an overseas pension scheme which have built up in a registered pension scheme before being transferred to the overseas pension scheme may equally have benefited from UK tax relief.
The schedule applies three main types of charge to members of non-UK schemes. These are the various charges referred to as the member payment charges and the taxable property unauthorised payment charge (see RPSM13102100), the annual allowance charge (see RPSM13102300) and the lifetime allowance charge (RPSM13102500).
However, for members of non-UK pension schemes, these charges are targeted only at payments that relate to the part of the member's overseas pension fund that has benefited from UK tax relief.
Schedule 34 modifies the way the charges operate to facilitate their application to these non-UK schemes, and further modifications are contained in The Pension Schemes (Application of UK Provisions to Relevant Non-UK Schemes) Regulations 2006 (SI 2006/207).
This chapter explains how these charges apply to certain members of non-UK pension schemes as if they were members of registered pension schemes. The schedule 34 modifications of the charging provisions are described in RPSM13102100 to RPSM13102600. The modifications provided for in the regulations referred to above are described in RPSM13102700 onwards.