Changes aim to align UK and non-UK schemes.
From 6 April 2017 the following will apply:
- Where a foreign pension or lump sum is paid to a UK resident, 100% of the pension arising will be chargeable to UK tax (to the same extent as if they had been paid from a registered pension scheme)
- No new pension schemes can be established under section 615 of ICTA 1988, and no further contributions can be made to existing schemes. Funds accrued in a section 615 scheme before 6 April 2017 will continue to be paid out using the rules before 6 April 2017.
- The tax treatment of funds in registered pension schemes (RPSs) based outside the UK will be more closely aligned with that of UK-based RPSs.
- UK tax charges can apply to a payment by a relevant non-UK scheme to an individual who has been resident outside the UK for less than 10 tax years.
- The 70% rule will be removed from the conditions that a pension scheme has to meet to be an ‘overseas pension scheme’ or a ‘recognised overseas pension scheme’, and the pension age test is revised so that additional payments may be made and the test still be met. As a result, if a non-occupational pension scheme is not regulated and the provider of that scheme is not regulated, it will not be able to be a qualifying overseas pension scheme or qualifying recognised overseas pension scheme.
Article from ACCA In Practice