Recent UK Pension reforms mean that uncertainty has risen inside the QROPS industry.
If you are looking to have your overseas pension scheme transferred from the UK before the age of 55 you could now face tax charges from the HMRC.
From 6 April 2015 the UK will favour pension savers over the age of 55 in the form of annuity abolishment and highly favourable tax treatment for pension fund beneficiaries.
So what does this mean for you? If your pension arrangement is registered under the QROPS regime prior to the 6th of April your QROPS provider could be subject to a ‘Pensions Age Test’. Providers will no longer be allowed to make benefits payable from a UK transferred fund before the age of 55 and failure to comply with the HMRC enforcements may result in their authorisation being revoked. Currently unauthorised transfer payments to jurisdictions outside of the UK are subject to a heavy tax liability of 55%.
On top of this, industry experts predict that it will be highly unlikely for all affected Irish schemes to amend their rules as most are not structured toward those transferring in from the UK.
If you are worried about how these changes will affect your pension retrieval you will need to effectively delist yourself and re-apply to the scheme. Because of poor communication from the HMRC this is not something that QROPS can control. If you continue to plan your transfer of your pension after this date you may be leaving yourself open to the 55% tax charge from the fund.
If you are still unsure how UK Pension reforms could affect you, get in touch! We can help answer any questions you may have.