Overseas pension transfers to be hit by 25 per cent charge
3 April, 2017
While the Chancellor’s Spring Budget was generally quiet in terms of announcements concerning pensions, one particular measure will be significant for anyone wishing to transfer their pensions overseas.
The new measure sees a 25 per cent charge applied to transfers on qualifying recognised overseas pension schemes (QROPS) and was effective from 9 March 2017, the day after the Spring Budget.
There are exemptions to the charge for people who can demonstrate a genuine need, such as where the individual and the pension are located within the European Economic Area.
There is also an exemption which applies in situations where the QROPS is provided by an individual’s employer.
The Government said: “This measure supports the Government’s objective of promoting fairness in the tax system. It continues to allow overseas transfers from pension schemes that have had UK tax relief that are made when people leave the UK and take their pension savings with them to their new country of residence.”