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HMRC internal manual

Pensions Tax Manual

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HM Revenue & Customs
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International: definition of a qualifying overseas pension scheme

Glossary PTM000001
   

 

Section 150(7) and paragraph 5(1) Schedule 33 Finance Act 2004

Regulation 2 The Pension Schemes (Category of Country and Requirements for Overseas Pension Schemes) Regulations 2006 - SI 2006/206

What is a qualifying overseas pension scheme
Notifying HMRC that a scheme is an overseas pension scheme
Exclusion of scheme from being a qualifying overseas pension scheme
Record-keeping in respect of a relevant migrant member by a qualifying overseas pension scheme

What is a qualifying overseas pension scheme

A qualifying overseas pension scheme is an overseas pension scheme where the scheme manager has

  • notified HMRC that it meets the conditions to be an overseas pension scheme and provided any such evidence that HMRC may require
  • undertaken to notify HMRC if the scheme ceases to be an overseas pension scheme, and
  • undertaken to comply with the prescribed benefit crystallisation information requirements

and HMRC has not excluded the scheme from being a qualifying overseas pension scheme - see Exclusion of scheme from being a qualifying overseas pension scheme below.

PTM112200 explains the conditions a scheme has to meet to be an overseas pension scheme.

PTM111800 explains what the prescribed benefit crystallisation information requirements are.

Notifying HMRC that a scheme is an overseas pension scheme

Form APSS 250 can be used by scheme managers to make the required notification and give the relevant undertakings to HMRC. Form APSS 250 is available from the gov.uk website (https://www.gov.uk/). Scheme managers must send the notification and undertakings to

Pension Schemes Services
HM Revenue & Customs
Ferrers House
Castle Meadow Road
Nottingham 
NG2 1BB

 

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Exclusion of scheme from being a qualifying overseas pension scheme

Paragraphs 5(3) to (5) and 6 Schedule 33 Finance Act 2004

HMRC may exclude a scheme from being a qualifying overseas pension scheme if they decide that:

  • there has been a significant failure to comply with the information reporting requirements set out at PTM111800 and
  • as a result it is inappropriate for tax relief to be given on contributions to the scheme.

A failure will be significant if, for example, a substantial amount of information has not been provided or if the failure to provide any information is likely to result in serious prejudice to the assessment or collection of tax. Any contributions made to the scheme after the date on which it ceases to be a qualifying overseas pension scheme will not receive tax relief.

If HMRC decides to exclude a scheme from being a qualifying overseas pension scheme HMRC must notify the individuals(s) appearing to be the scheme manager that the scheme has been excluded. The scheme manager can appeal against an exclusion decision. An appeal must be brought within the period of 30 days beginning with the day on which the notification of the decision was given.

It is also possible for HMRC to decide that a scheme is no longer excluded and notify the scheme manager accordingly.

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Record-keeping in respect of a relevant migrant member by a qualifying overseas pension scheme

Scheme managers of money purchase arrangements must keep a record of UK tax-relieved contributions made to the arrangement in each tax year by, or on behalf of, each relevant migrant member. They also need to keep a record of contributions made in those tax years in respect of each relevant migrant member by their employer.

Managers of defined benefits arrangements and cash balance arrangements need to keep a record of the increase in the value of each relevant migrant member’s rights under the arrangement for each tax year in which they are a currently-relieved member of the scheme. They also need also to keep a record of UK tax-relieved contributions made by, or on behalf of, each such member (excluding employer contributions).

Managers of hybrid arrangements also need to keep such records, based on whichever type of benefit determines the relevant migrant member’s pension input amount in a tax year (see PTM113320).

Relevant migrant members need to know the amount of contributions made, or of the subsequent accrual of rights, in order to determine whether they are liable to an annual allowance charge, or lifetime allowance charge (see PTM113400 onwards for more information). Those charges are determined by reference to a relevant migrant member’s pension input amounts. PTM113320 to PTM113340 sets out how pension input amounts are calculated under the different types of arrangements.