RPSM13102175 - Technical Pages: International: Application of charges to non-UK schemes: Member payment charges and taxable property unauthorised payment charge: Relevant transfer examples

Examples of relevant transfers

Example A

Gillian transferred £500,000 from a registered pension scheme (scheme A) to a relevant non- UK scheme (scheme B) that is a qualifying recognised overseas pension scheme. This is the amount crystallised by virtue of benefit crystallisation event 8 of section 216. Her relevant transfer fund in scheme B is therefore £500,000.

Gillian then transfers £150,000 from another relevant non-UK scheme (scheme C) to scheme B. She has received migrant member relief on contributions of £50,000 to scheme C and £100,000 was contributed without UK tax relief whilst she was resident in Japan. So her UK tax-relieved fund under that scheme amounted to £50,000. The transfer was not subject to the unauthorised payments charge. Her relevant transfer fund in scheme B is therefore increased to £550,000. There is no taxable asset transfer fund within her relevant fund because scheme B is not an investment-regulated scheme.

Example B

Sarah transfers £150,000 from a registered pension scheme (scheme A) to a relevant non-UK scheme (scheme B) that is a qualifying recognised overseas pension scheme. The transfer is treated as a benefit crystallisation event 8 under section 216. It is not subject to an unauthorised payments charge. She does not have a UK tax-relieved fund under scheme B. Her relevant transfer fund under scheme B is £150,000 as a consequence of the transfer of that amount from scheme A. There is no taxable asset transfer fund within her relevant transfer fund because scheme B is not an investment-regulated scheme.

She then transfers £200,000 from scheme B to another relevant non-UK scheme (scheme C) that is a qualifying recognised overseas pension scheme. The transfer is treated as a benefit crystallisation event 8 under section 216. It is not subject to an unauthorised payments charge. She does not have a UK tax-relieved fund under scheme C. Her relieved transfer fund under scheme C is £150,000, the amount of the relevant transfer fund under scheme B that was transferred to it. There is no taxable asset transfer fund within her relevant transfer fund.

She then transfers £600,000 from scheme C to another relevant non-UK scheme (scheme D) that is a qualifying recognised overseas pension scheme. The transfer is treated as a benefit crystallisation event 8 under section 216. It is not subject to an unauthorised payments charge. Her relevant transfer fund in scheme D is therefore £150,000, the amount of the relevant transfer fund under scheme C that was transferred to it. She does not have a taxable asset transfer fund within her relevant transfer fund.