HM Revenue & Customs has responded to UK government discussions on giving the same rights to qualifying recognised overseas pension schemes as to traditional UK-based pensions.
Commenting on the government’s Freedom and Choice in Pensions consultation, which closed in July, HMRC stated that the changes to pensions rules, which will be brought into force in April 2015, should be extended to Qrops schemes.
A spokesman for HMRC pointed to the government’s own response to the consultation. In section 2.8, it said it would be “considering the implications” of changes to the pension tax rules, which would have implications for the rules relating to Qrops.
The spokesman said: “The government is considering these implications further to ensure that the rules relating to Qrops are appropriate when the new system comes into force.”
As far back as April 2014, just after significant pension changes were announced in the Budget, the Joint Expatriate Forum on Tax and National Insurance Contributions had warned that the changes would affect Qrops.
In its minutes, dated 29 April 2014, the JEF had warned that although the chancellor had announced more flexibility when people came to get their pensions, international schemes had not been mentioned, despite the fact overseas pension schemes and recognised schemes would be affected.
Nigel Green, chief executive of international firm deVere Group, said: “The UK government’s discussions to afford the same new rights to Qrops as traditional UK-based is evidence of the market’s maturity. The fact that HMRC is considering this demonstrates yet again that Qrops are part of mainstream retirement planning options. Qrops are becoming an ever-more established pensions option with expats and those who are considering a move abroad, with annual rises in popularity since they were officially recognised by HMRC in 2006.”
JEF minutes, April 2014:
“There were two areas where the Budget announcement would have an effect:
■ The definition of overseas pension schemes and recognised overseas pension schemes
■ The UK tax charged on non-UK schemes, particularly the equivalent of the unauthorised payments charge and surcharge.”