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HMRC internal manual

National Insurance Manual

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

Paragraph 3(a) and (b) of Part 6 of Schedule 3 to the Social Security (Contributions)Regulations 2001 (as substituted by regulation 8(3) of the Social Security (Contributions)(Amendment No. 2) Regulations 2006)

Paragraph 2 of Schedule 33 to the Finance Act 2004

Article 15 of the Taxation of Pensions Schemes (Transitional Provisions) Order 2006(SI 2006/572)

NIM02730 explains the meaning of migrant member relief and transitionalcorresponding relief. An employer’s payment to which either:

  • paragraph 2 of Schedule 33 (tax relief for employer contributions to a qualifying overseas pension scheme) applies; or
  • article 15 of the above Order (employers with pre-commencement entitlement to corresponding relief)

applies, is disregarded in the calculation of earnings for Class 1 NICs purposes:

Paragraph 2 will apply to an employer’s payment if

  • the payment is a “relevant migrant member contribution”. That is, a payment made to a “qualifying overseas pension scheme”; and
  • the employee is a “relevant migrant member” of the scheme.

In broad terms, article 15 will apply to an employer’s payment if:

  • their employee was, in the 2005/06 tax year, a member of a “corresponding” overseas pension scheme,
  • the employee is still a member of that scheme,
  • the scheme manager has undertaken to provide HMRC with information about payments made to the employee, and
  • the employer received a deduction in accordance with section 76(6A) and (6C) Finance Act 1989 for payments made in the 2005/06 tax year to that scheme in respect of the employee, and
  • the employer’s payment to that scheme is in respect of the employee.

For the meaning of:

  • “qualifying overseas pension scheme”, see RPSM13101060
  • “relevant migrant member”, see RPSM13101040
  • “corresponding” overseas pension scheme, see RPSM13101120.

For details of:

  • the Class 1A NICs position on a payment to a RPS, see NIM14510
  • the Class 1 NICs position on any benefit from the scheme which is referable to an employer’s payment to which either paragraph 2 or article 15 applies, see NIM02732
  • aspects of the tax position on:



  • a contribution made by an employer, see RPSM13101030 and RPSM13101120
  • benefits from overseas pension schemes, see RPSM13102020.
  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.