HM Revenue and Customs has published a new update on Recognised Overseas Pension Schemes, stating that from tomorrow (17 June) the list of notifications will be temporarily suspended for a short period to allow it to be reformatted.
In its regular pension schemes newsletter, the tax watchdog also mentioned that following the pension flexibility changes which took effect from 6 April it has updated the forms used for overseas schemes to confirm their compliance with UK tax rules and to report payments.
It added that the the Qrops Online System has not been updated, so notification and payments from schemes are only able currently to report using the forms on the gov.co.uk website.
The updates comes on the back of a frenzied few weeks of news in relation to overseas pensions, amid a clampdown on access rules for schemes in other jurisdictions in the wake of pension freedoms coming into force in the UK.
Yesterday (15 June), Scottish Widows became the latest to halt transfers temporarily while confusion as to whether schemes in countries such as Australia, New Zealand and Ireland, which allow access before the age of 55 in certain circumstances, are able to hold UK tax-relieved funds.
A letter, dated 17 April and seen by FTAdviser, was sent to overseas schemes and backdates regulations to 6 April. Failure to comply could mean transfers in are treated as unauthorised payments at hit with a retrospective 55 per cent tax charge.
One Australian transfer advice specialist has also moved to halt transfers, while a number of New Zealand schemes have been removed from the HMRC list already and several providers in Ireland appear to have left the market altogether.
Discussions are underway with HMRC, which is also working on a new regime to replace the 70 per cent rule, which was reinstated at the last minute before new freedoms came into effect and requires most overseas schemes to ringfence most of a person’s fund for providing income.
The new forms still require schemes based outside of the European Union to confirm they comply with the 70 per cent rule.
In relation to the suspension of the list, in the HMRC newsletter it was revealed that the Rops notifications list will be available again from 1 July, although the reformatted list will look “significantly different”.
It is not clear if the suspension of the list is related to the ongoing debates over overseas pensions since April.
peter.walker@ft.com, ashley.wassall@ft.com
