Those looking to move a UK pension offshore face a 25 per cent tax charge under a dramatic crackdown on pension transfers.
The tax charge, announced in the Budget, will apply to individuals requesting transfers to qualifying recognised overseas pension schemes (Qrops) on or after March 9 2017, the government said.
However, the 25 per cent tax charge will not apply if, from the point of transfer, both the individual and the offshore pension scheme are in the same country, both are within the European Economic Area (EEA), or the Qrops is provided by the individual’s employer.
“If this is not the case, there will be a 25 per cent tax charge on the transfer and the charge will be deducted before the transfer by the administrator or manager of the pension scheme making the transfer,” the government said.
Payments out of funds transferred to a Qrops on or after April 6 2017 will be subject to UK tax rules for five tax years after the date of transfer, regardless of where the individual is resident, the government also announced.
Continue reading (Financial Times) →