It is possible to transfer your pension rights to a pension
scheme abroad, if the rules of your
registered pension scheme allow such action.
Some overseas schemes may be registered with HMRC. A transfer to one of these schemes is a recognised transfer, without tax consequences, as the receiving scheme is a registered pension scheme.
Other overseas schemes are not registered with HMRC. The consequences of transferring your pension rights to such a scheme depends on whether or not it is a qualifying recognised overseas pension scheme.
A transfer to such a scheme is regarded as a
benefit crystallisation event. This means that the
administrator of your current scheme has to measure the amount of
your pension rights being transferred against the amount of the
lifetime allowance. As part of the process you
should provide your
scheme administrator with details of the amount of
the lifetime allowance that you have available.
If your scheme administrator calculates that you have sufficient lifetime allowance available for the transfer he will advise you of the amount of lifetime allowance that the transfer overseas will use up. This information should be kept for possible future reference as you would need to take it into account if you were to take benefits from a registered pension scheme.
If your scheme administrator calculates that you do not have sufficient lifetime allowance available he will work out how much tax by way of lifetime allowance charge is payable and deduct it from the amount being transferred overseas.
A transfer to such a scheme is regarded as an unauthorised payment. Unauthorised member payments are subject to tax at 40% on you as the member. An additional tax charge of 15% may be payable by you if the amount transferred either alone or when added to any other unauthorised member payments made within 12 months from the scheme is greater than 25% of your pension fund/rights.
|Glossary ( RPSM20000000)|