NIM02730 - Earnings of employees and office holders: retirement benefits schemes from 6th April 2006 - overseas pension schemes: employer's payments that qualify for migrant member relief or transitional corresponding tax relief: definitions
Paragraph 3(a) and (b) of Part 6 of Schedule 3 to the Social Security (Contributions) Regulations 2001 (as inserted by regulation 8(3) of the Social Security (Contributions)(Amendment No. 2) Regulations 2006)
Paragraph 2 of Schedule 33 to Finance Act 2004
Article 15 of the Taxation of Pension Schemes (Transitional Provisions) Order 2006 (SI2006/572)
Migrant member relief
In broad terms, where an individual:
- comes to work in the United Kingdom; and
- is an existing member of a qualifying overseas pension scheme; and
- satisfies certain other conditions
their employer may be eligible for United Kingdom tax relief on any payment it makes into the scheme. Such tax relief was available from 6 April 2006, known as “migrant member relief”.
Transitional corresponding relief
Broadly, an employer may be eligible for United Kingdom tax relief on payments it makes inrespect of an employee to an overseas pension scheme which HMRC has accepted as “corresponding” to a United Kingdom-approved pension scheme if they received a deduction for payments made in the 2005/06 tax year to that scheme in respect of that employee. From 6 April 2006, the tax relief became known as “transitional corresponding relief”.
For details of the Class 1 NICs position on: