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HMRC internal manual

National Insurance Manual

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HM Revenue & Customs
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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 makesinto the scheme. Such tax relief is, from 6th April 2006, known as “migrant memberrelief”.

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 adeduction for payments made in the 2005/06 tax year to that scheme in respect of thatemployee. Such tax relief is, from 6th April 2006, known as “transitionalcorresponding relief”.

For details of:

  • the Class 1 NICs position on:

 

 

  • an employer’s payment into a qualifying overseas pension scheme or a “corresponding” overseas pension scheme, see NIM02731
  • benefits out of such a scheme, see NIM02732

 

  • for income tax purposes, the basic principles about migrant member relief and transitional corresponding relief, see RPSM13101010 and RPSM13101100.
  Words in bold are defined in the Glossary to the Registered Pension Schemes Manual (RPSM20000000). They have the same meaning for NICs purposes unless otherwise stated.