RPSM13102320 - Technical Pages: International: Application of charges to non-UK schemes: Annual allowance: Currently-relieved non-UK pension schemes

Currently-relieved non-UK pension schemes

A pension scheme is a currently-relieved non-UK pension scheme in relation to a tax year if it is not a registered pension scheme and if one or both of the following conditions is met:

1. relief from UK tax is given in respect of individual or employer contributions paid to it during the tax year by virtue of schedule 33 or under double tax arrangements. That includes contributions that have received migrant member relief ( RPSM13101000 to RPSM13101140 refer) and employer contributions in respect of which an employee is tax-exempt under section 308A ITEPA 2003. It also includes contributions that have received transitional corresponding relief under paragraph 51 of schedule 36, or under article 15 or 17 of The Taxation of Pension Schemes (Transitional Provisions) Order 2006 ( RPSM13101100 refers). The contributions must have been made after 5 April 2006.
2. any of its members has been exempt from liability to tax by virtue of section 307 ITEPA 2003 in respect of provision for retirement or death benefits made by their employer at any time during the tax year when it is an overseas pension scheme ( RPSM13101070). Such provision must have been made after 5 April 2006.

Section 307 ITEPA 2003 exempts members from tax under chapter 10 ITEPA 2003 on their accrual of benefits in the scheme as a benefit in kind. So b) provides that the annualallowance charge provisions will apply even where no contributions have been made to the scheme during the tax year, for example because of a contributions holiday or because the scheme is unfunded.