Pension trustees: reclaim tax deducted from investment income
If a registered pension scheme has had UK Income Tax deducted from its investment income you can ask HMRC to repay the tax.
Who can make a repayment claim?
Repayment claims can be made by either:
- the legal owner of the scheme’s assets - the trustees for a trust based scheme
- a third party - authorised by the legal owner of the scheme’s assets
- a common investment fund - on behalf of its fund members
Nominating a third party
You can nominate one or more third parties to make repayment claims. If you want to nominate a third party to apply for repayments you must complete form APSS 146A ‘repayments third party authority’. If they’re a company you also need to fill in form APSS 146B ‘repayments specimen signatures’.
HM Revenue and Customs (HMRC) won’t process any repayment claim from a third party until these forms have been received.
You can nominate a third party to make a single claim on behalf of several registered pension schemes if you’re a member of a common investment fund.
If the details of the third parties change or you want to nominate a new third party you’ll need to notify the amendments using form APSS 146A or APSS 146B.
Tax that can’t be reclaimed
You can’t reclaim tax deducted from:
- trading income
- dividends from shares owned by the pension scheme
- property investment limited liability partnerships (LLPs)
How to make a repayment claim
If you’re the trustee of a registered pension scheme you must complete a Self Assessment tax return on form SA970. You can reclaim tax before the end of the tax year by using form R63N ‘repayment request for registered pension schemes’ but you’ll still need to complete the tax return at the end of the year.
A third party must use form R63N no matter when they’re reclaiming tax.
Before you make a claim for repayment
Before reclaiming you must do both of the following:
- complete and return form form APSS 146 ‘registration for Income Tax repayments’
- provide specimen signatures for those who will send the repayment claims
HMRC won’t repay tax until all this information has been given.
You’ll need to send in an amended APSS 146 if:
- the scheme’s assets owner has changed - for example if there’s been a change in the scheme’s trustees
- you want to change your bank account details
- the person sending in the repayment claims is changing
Information you need to make a claim for repayment
To make a claim for repayment you’ll need both the:
- Pension Scheme Tax Reference (PSTR)
- Unique Taxpayer Reference (UTR) - unless it’s your first claim
The PSTR is given to the scheme administrator when the pension scheme is first registered. If the scheme was set up and tax approved before 6 April 2006 it will have been given a PSTR but the scheme administrator may not know what it is and you might have to take steps to find it.
The UTR is a 10 digit reference number given to a scheme after the first repayment claim is made. You can find the UTR on correspondence about repayment claims or SA970 tax returns. If this is the first repayment claim for the scheme you won’t have a UTR yet so tell HMRC that this is your first claim using a covering letter.
Evidence of tax deducted
You shouldn’t send in tax vouchers with the claim form. If HMRC wants to see the tax vouchers they’ll ask for them.
Time limits for claiming a refund
Pension schemes can claim a refund up to four years after the end of the tax year in which the tax was deducted. For example, for the tax year ending 5 April 2015 the claim deadline is 5 April 2019.
How often you can make a repayment request
You can only make one repayment claim each month and the amount reclaimed must be at least £5,000.
If the amount is less than £5,000 you must wait until either:
- the amount to be repaid is at least £5,000
- the end of the tax year if this is earlier
Where more than one third party is nominated to make claims HMRC will accept one claim per third party per month as long as each claim is at least £5,000.
Common investment funds
When you pool your investments with other registered pension schemes in a common investment fund you can arrange for the fund to make repayment claims on your joint behalf. The common investment fund must be an investment agency and can’t be a registered pension scheme itself.
Before making a payment to the common investment fund, HMRC will need:
- a list of all the names and tax references of the schemes that are members - the common investment fund must then tell HMRC when schemes join or leave the fund
- form APSS 146 from each scheme in the fund
- form APSS 146 for the common investment fund itself - accompanied by a letter showing that the person signing the APSS 146 is responsible for managing the common investment fund and has authority to sign on its behalf
- form APSS 146A (and APSS 146B if appropriate) - if the common investment fund wants to nominate a third party to make repayment claims on its behalf
If the pension scheme is to be wound up
Apply for a certificate of residence for overseas repayments
If you run a registered pension scheme based in the UK and the scheme invests overseas you may be able to reclaim tax deducted on that investment income by the overseas tax authorities.
There are some conditions that can vary from case and country but the starting point is a Double Taxation Agreement must exist between the overseas tax authority and HMRC.
To make a claim from the overseas authority you’ll need to apply to HMRC for a certificate of residence which you can use to support your claim.
HMRC will have to already hold a completed APSS 146 for you before you make a claim for repayment.
If the conditions are satisfied you’ll need to use one or more of the following forms to get the certificate: