HMRC has delisted thousands of overseas schemes that could previously accept pension transfers from Britain
HM Revenue and Customs has launched a crackdown on overseas schemes open to UK expats who want to move their pension abroad, with hundreds being removed from its approved list.
Expats in Australia were among the hardest hit. Of the 1,600 Qualifying Recognised Overseas Pension Scheme (Qrops) providers that were on the list, only one now remains – the Local Government Superannuation Scheme.
Other countries to see significant culls in the number of Qrops available to expats include the Republic of Ireland, down from 797 schemes to just 56. Switzerland has fallen from 100 to one scheme, Spain has fallen from 16 to two schemes, and South Africa has dropped from 29 schemes to seven, according to international adviser Chase Belgrave, which warned that Canada could be next.
Savers who transfer their pension to a non-qualifying scheme will face a 55pc tax charge, imposed by HMRC, on the money in the pot.
A Qrops is an attractive option for expats who wish to take out of the equation the currency risk on their pension payments .
The cull of Australian schemes was not a surprise. Financial advisers had expected a number of them to disappear because they allowed expats to access their pension before they reached 55, so they would not be deemed Qrops by HMRC.