Information and administration: information notices in respect of overseas pension schemes
Information notices under Schedule 36 Finance Act 2008
Schedule 36 Finance Act 2008
The Registered Pension Schemes etc. (Information)(Prescribed Descriptions of Persons) Regulations 2010 - SI 2010/650
HMRC can require someone to provide information or produce documents to check the tax position of a taxpayer by issuing an information notice. These information notices can be sent to the taxpayer or to another person (a third party).
Payments made to or from an overseas pension scheme can generate UK tax charges on the member. HMRC can therefore issue an information notice to the scheme manager of an overseas pension scheme or anyone else in respect of payments to or from an overseas pension scheme. This will include qualifying recognised overseas pension schemes (QROPS), former QROPS and qualifying overseas pension schemes (QOPS).
An information notice sent to the person on whom a tax charge can arise will be a first party notice. As the scheme manager of a QROPS, former QROPS or QOPS is not liable to UK tax charges under Finance Act 2004 an information notice sent to them will be a third party information notice.
From 17 July 2013 HMRC can issue an information notice to a third party without the agreement of either the taxpayer or the Tribunal if the notice asks for information relating to either:
- a QROPS, or former QROPS, or
- an annuity purchased with funds held by a QROPS or former QROPS.
This requirement covers all QROPS and former QROPS. For the avoidance of doubt HMRC can issue an information notice under this provision to a scheme that ceased to be a QROPS before 17 July 2013.
Requests for information relating to a QROPS or former QROPS can be made by any HMRC officer for information up to 10 years old without the need for specific authorisation. Requests for older information can be made if the information notice has been issued by, or with the agreement of, a specifically authorised HMRC officer.
HMRC will send a copy of a third party notice relating to a QROPS or former QROPS to the scheme manager. To prevent two identical information notices (original and copy) being sent to the same person this provision won’t apply where the information notice is being sent to the scheme manager or to anyone who has been a scheme manager of that scheme at any time in the past 10 years.
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 (external users please see http://www.hmrc.gov.uk/manuals/chmanual/CH26000.htm).
In addition to the standard penalties under Schedule 36 Finance Act 2008 if a QROPS fails to comply with an information notice it may be excluded from being a QROPS - see PTM112500.
Information notices specific to a qualifying recognised overseas pension scheme (QROPS)
Regulations 3 (5A) and 3A The Pension Schemes (Information Requirements for Qualifying Overseas Pension Schemes, Qualifying Recognised Overseas Pension Schemes and Corresponding Relief) Regulations 2006 - SI 2006/208
In addition to the general powers at Schedule 36 Finance Act 2008 HMRC has specific power to issue an information notice to the scheme manager of:
- a QROPS, and
- a former QROPS if it ceased to be a QROPS on or after 14 October 2013.
There are two circumstances where HMRC may require the scheme manager to provide information by sending a written notice.
- Regulation 3(5A): where the scheme manager is company to provide the names and addresses of company directors. HMRC will specify the time limit for providing this information in the notice.
- Regulation 3A: where the scheme has received a transfer that has at any time represented rights under a registered pension scheme or another QROPS. PTM112700 has full guidance on when an information notice can be issued in this circumstance, what the notice can cover, and time limits.
If a QROPS scheme manager fails to comply with an information notice issued under either of these regulations the scheme may be excluded from being a QROPS - see PTM112500.
If a scheme manager of former QROPS fails to comply with an information notice issued under regulation 3A they may be liable to penalties. . Penalties will apply as if the information and required reporting time had been specified in an information notice issued under Schedule 36 Finance Act 2008. CH26000 (external users please see http://www.hmrc.gov.uk/manuals/chmanual/CH26000.htm) provides guidance on the penalties due in these circumstances.