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HMRC internal manual

Pensions Tax Manual

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International: qualifying recognised overseas pension schemes (QROPS): QROPS reporting requirements

Glossary PTM000001
   

 

Section 169(2)(b) - (c) and (4) Finance Act 2004

The scheme manager of a qualifying recognised overseas pension scheme (QROPS), has undertaken to notify HMRC if the scheme ever ceases to be a recognised overseas pension scheme (ROPS), and to comply with any ‘prescribed information requirements’.

Apart from reporting that their scheme has ceased to be a QROPS, these reporting requirements will also apply to the scheme manager of a scheme that became a former QROPS on or after 14 October 2013.

Reporting payments made by the scheme
Changes to information supplied
Reporting ceasing to be a QROPS
Providing HMRC with information about how the scheme meets the ROPS conditions
Providing information to HMRC about transfers received by the scheme
Other information that a QROPS may need to provide to HMRC
Information to be provided about the member flexibly accessing their pension savings
Information to be provided on transfer to another QROPS 
What happens if the scheme manager does not provide information
Information notices under Schedule 36 Finance Act 2008

Reporting payments made by the scheme

Regulation 3(2) to (7) The Pension Schemes (Information Requirements - Qualifying Overseas Pension Schemes, Qualifying Recognised Overseas Pensions Schemes and Corresponding Relief) Regulations 2006 - SI 2006/208

The scheme manager must tell HMRC when they make a payment in respect of a member who has a ‘relevant transfer fund’. A relevant transfer fund is created when a member transfers in sums and assets from either

  • a registered pension scheme, or
  • another overseas pension scheme that is a relevant non-UK scheme.

PTM113210 provides full guidance on what constitutes a relevant transfer fund

Payments include not just pension and lump sum payments but also any transfer out of the scheme.

The scheme manager must also notify HMRC when they are treated by the tax law as making a payment, in respect of such a member, but only to the extent it relates to a relevant transfer fund.

The provisions under which a scheme manager is treated as making a payment are sections 172 to 174A Finance Act 2004, paragraph 2A Schedule 28 and Paragraph 3A Schedule 29 Finance Act 2004. Guidance on these tax charges is at:

  • Sections 172 to 172D - see PTM133200 to PTM133600,
  • Section 173 - see guidance starting at PTM133900,
  • Section 174 - see PTM133700,
  • Section 174A - See PTM121000 for an introduction to the tax charge on taxable property
  • Paragraph 3A schedule 29 - see guidance starting at PTM133800,
  • Paragraph 2A Schedule 28 - see PTM062340.

The scheme manager must report the payment (or deemed payment) to HMRC within 90 days beginning with the date of the payment (or deemed payment). HMRC may, in limited circumstances, agree a later date with the scheme manager.

Where the payment is part of a stream of pension payments, it is only necessary to send HMRC a notification of the first such payment any individual receives in respect of that particular pension stream. If the person starts to receive a second or subsequent pension stream, because they have rights to more than one pension under the scheme, then the first pension payment of each pension stream must be reported.

Where a non-pension payment (such as a lump sum or transfer) is made, a notification is needed in respect of each payment even if the payment of a pension has been reported already.

Details to report

HMRC provides forms APSS253 and APSS253 (Insert) for the purposes of reporting these payments. These forms are available on gov.uk.

The scheme manager must provide HMRC with the following information:

  • about the member
    • the member’s name, principal residential address and contact details
    • the member’s date of birth
    • the member’s National Insurance number or if they don’t have one, their UTR (unique tax reference) with HMRC if they have one. If the member has neither a National Insurance number nor a UTR and they are not UK resident the scheme manager should provide any reference number allocated by the tax authority of the country in which the member is tax resident
    • If the member isn’t tax resident in the UK the date they ceased to be resident for tax purposes in the UK.
  • the name, address and contact details of the QROPS and the scheme manager
  • the date, amount and nature of the payment.
  • if the payment is made to a pension scheme, the name and address of the receiving scheme, and if the scheme is a registered pension scheme or a QROPS the relevant Pension Scheme Tax Reference or QROPS number allocated by HMRC.
  • if as a result of the payment there is no relevant transfer fund a statement to that effect

Where the payment has been made following the member’s death the following details for the recipient of the payment are needed.

  • Payment to an individual:
    • the recipient’s name, principal residential address and date of birth, and
    • the recipient’s National Insurance number or if they don’t have one, their UTR with HMRC if they have one. If the recipient isn’t tax resident on the UK and has neither a National Insurance number nor a UTR and the scheme manager should provide any reference number allocated by the tax authority of the country in which the individual recipient is tax resident.
  • Payment to someone other than an individual - the recipient’s name and address.

For payments made or treated as made before 14 October 2013 the following information on the APSS 253 doesn’t have to be provided:

  • the member’s date of birth
  • if the member isn’t tax resident in the UK the date they ceased to be resident for tax purposes in the UK.
  • if the member doesn’t have a National Insurance number their UTR or any reference number allocated by the tax authority of the country in which the member is tax resident
  • if as a result of the payment there is no relevant transfer fund a statement to that effect
  • details of the recipient if the payment is made following the member’s death.

When payments do not need to be reported

The scheme manager does not need to report a payment to HMRC if both the following conditions are met.

  1. The payment is made more than 10 years after the day of the transfer that created the ‘relevant transfer fund’, and
  2. The member is neither UK resident when the payment is made, nor in any of the previous five tax years. A UK tax year runs from 6 April to the following 5 April.

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Changes to information supplied

Regulation 3C The Pension Schemes (Information Requirements for Qualifying Overseas Pension Schemes, Qualifying Recognised Overseas Pension Schemes and Corresponding Relief) Regulations 2006 - SI 2006/208

If at any time after any information has been supplied to HMRC, it becomes apparent to the scheme manager that:

  • there is a material change affecting the information, or
  • that the information is incomplete or contains a material inaccuracy

they must provide HMRC with details of the change, the complete information or correction of the inaccuracy, as appropriate. The scheme manager can use form APSS 251A to provide details of the change.

The scheme manager must give the information to HMRC:

  • within 30 days beginning on the day that the change occurred or the scheme manager became aware of the lack of completeness or inaccuracy, or
  • by such later date that may be agreed between HMRC and the scheme manager.

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Reporting ceasing to be a QROPS

Regulation 3B The Pension Schemes (Information Requirements - Qualifying Overseas Pension Schemes, Qualifying Recognised Overseas Pensions Schemes and Corresponding Relief) Regulations 2006 - SI 2006/208

A QROPS scheme manager must notify HMRC that their scheme has ceased to be a QROPS within 30 days, beginning with the date that the scheme ceased to be a QROPS. The scheme manager must give HMRC all the following information as part of the notification:

  • the scheme’s name and address
  • the date of cessation and the reason the scheme ceased to be a QROPS
  • the value at the cessation date of the ‘relevant transferred sums and assets’ for each ‘relevant transfer fund’ under the scheme
  • For each member who has a relevant transfer fund under the scheme:
    • name and date of birth,
    • principal residential address, and
    • National Insurance number, or if they don’t have one, their UTR (unique tax reference) with HMRC if they have one. If the member has neither a National Insurance number nor a UTR and is no longer UK tax resident the scheme manager should provide any reference number allocated by the tax authority of the country in which the member is tax resident.

After a scheme has ceased to be a QROPS the scheme manager must still make certain reports to HMRC in accordance with the guidance at PTM112800.

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Providing HMRC with information about how the scheme meets the ROPS conditions

Regulation 3(1)(g) The Pension Schemes (Information Requirements for Qualifying Overseas Pension Schemes, Qualifying Recognised Overseas Pension Schemes and Corresponding Relief) Regulations 2006 - SI 2006/208

HMRC can write to a QROPS scheme manager at any time asking them to provide information or evidence about how the scheme meets the condition to be a recognised overseas pension scheme (ROPS). HMRC can ask for information or evidence about any of the following areas.

About the scheme manager

The scheme manager’s name, address, contact detail and legal status

About the scheme:

The scheme name, address, the date it was set up and the country or territory where the scheme is established

About the scheme regulation

Whether or not the scheme is regulated in the country or territory in which it is established.

If the scheme is regulated the name and address of the regulator and any reference number allocated by that regulator

About the scheme’s tax treatment

The name and address of the tax authority for the scheme in the country or territory in which it is established and the reference number, if any, allocated by that tax authority

If the scheme is set up by an international organisation this information doesn’t need to be provided

How the scheme meets the conditions

Confirmation as the basis on which the scheme satisfies the requirement of regulations 2 and 3 of The Pension Schemes (Categories of Country and Requirements for Overseas Pension Schemes and Recognised Overseas Pension Schemes) Regulations 2006 - SI 2006/206. PTM112200 to PTM112300 provides guidance about these regulatory conditions.

If a scheme is, or was a QROPS, only because it meets the requirements of either regulation 2(2)(c)(ii) or 3(4) of SI 2006/206 (requirement for at least 70 per cent of the transfer to be used to provide an income in retirement) evidence demonstrating that it meets that requirement.

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Providing information to HMRC about transfers received by the scheme

Regulation 3A The Pension Schemes (Information Requirements for Qualifying Overseas Pension Schemes, Qualifying Recognised Overseas Pension Schemes and Corresponding Relief) Regulations 2006 - SI 2006/208

HMRC can require the QROPS scheme manager to provide information if that scheme received a transfer whilst the scheme had QROPS status and the transfer came from:

  • a registered pension scheme, or
  • another QROPS where the transfer included rights that originated from a registered pension scheme.

This information must be provided

  • within 90 days beginning on the day the notice is given by HMRC, or
  • by such other time as may be agreed between HMRC and the QROPS

HMRC may send a written notice asking for any of the following information:

  1. the name and address of the body that regulates the scheme and the reference number, if any, issued to the scheme by that regulator
  2. the name and address of the tax authority which administers the taxation of the scheme and the reference number, if any, issued to the scheme by that tax authority,
  3. evidence to show that at the time of the transfer the scheme met the conditions to be a ROPS continues to meet the ROPS conditions (see PTM112200 to PTM112300)
  4. the date of the transfer to the scheme,
  5. where the transfer is from a registered pension scheme, the name and address of that scheme
  6. the name and address of any bank, and details of any bank account which the scheme has used in relation to the transfer,
  7. details of the sums and assets transferred (and how they have been applied by the scheme that received them if the notice is to that receiving scheme),
  8. the name, principal residential address, date of birth and the National Insurance number, if any, of the member who is connected with the transferred funds,
  9. if the member payment provisions do not apply to the member the date the member ceased to be resident in the UK
  10. any other evidence relating to the transfer that HMRC requires

The member payment provisions apply to a member if the member:

  • is UK resident, or
  • was UK resident in any of the previous five tax years

A UK tax year runs from 6 April to the following 5 April.

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Other information that a QROPS may need to provide to HMRC

Regulation 3(5A) The Pension Schemes (Information Requirements - Qualifying Overseas Pension Schemes, Qualifying Recognised Overseas Pensions Schemes and Corresponding Relief) Regulations 2006 - SI 2006/208

If the scheme manager is a company HMRC may make a written request for the name and addresses of each company director. The notice will specify the time by which the information must be provided.

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Information to be provided about the member flexibly accessing their pension savings

When a member flexibly accesses benefits on or after 6 April 2015 they become subject to the money purchase annual allowance rules (see PTM056510). This includes when a member flexibly accesses their benefits under a QROPS.

QROPS scheme managers are required to provide information to members and to other scheme managers or scheme administrators of registered pension schemes. PTM166300 and PTM166700 provide guidance on these information requirements.

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Information to be provided on transfer to another QROPS

Regulation 3AD The Pension Schemes (Information Requirements for Qualifying Overseas Pension Schemes, Qualifying Recognised Overseas Pension Schemes and Corresponding Relief) Regulations 2006 - SI 2006/208

If a transfer to another QROPS includes part or all of a member’s relevant transfer fund or UK tax-relieved fund (see PTM113230 for definitions) the transferring scheme manager must provide the receiving scheme manager with the following information:

  • the value of the member’s relevant transfer fund included in the transfer
  • the value of the member’s UK tax -relieved fund included in the transfer, and
  • if the transfer includes part or all of the member’s relevant transfer fund, and the transferring scheme is aware of any recognised transfer from which the transfer derived, the fact that there was a recognised transfer and where the scheme manager knows it the date of the recognised transfer.

This information must be provided before the end of 91 days beginning with the date of the transfer to the receiving scheme.

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What happens if the scheme manager does not provide information

If the scheme manager fails to make the reports within the required time HMRC can exclude the scheme from being a QROPS - see PTM112500.

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Information notices under Schedule 36 Finance Act 2008

HMRC can ask the scheme manager to provide information or produce documents using the powers at Schedule 36 Finance Act 2008. PTM169000 gives more information about these powers. If the scheme manager does not comply with an information notice penalties will be due. Guidance on when penalties may be charged, and the amounts due for failing to comply with an information notice can be found in the Compliance Handbook starting at CH26000.

A scheme can also be excluded from being a QROPS if it fails to comply with a Schedule 36 information notice.

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What happens if the scheme manager of a former QROPS does not provide information

If the scheme manager of a former QROPS fails to make the reports within the required time HMRC can impose penalties on the scheme manager (this applies to schemes that became former QROPS from 14 October 2013) - see PTM112800.