UK residents with overseas pensions will have to provide more information on their "qualifying recognised overseas pension scheme" in an effort to close tax loopholes.
HMRC plans to bring in a requirement for an overseas scheme to report payments out of qrops funds transferred from a UK pension scheme even if it is no longer a qrops.
Qrops are intended to allow British expatriates to have access to a regular income once they have moved abroad. However, HMRC has said that the pensions tax advantages have been abused by UK residents who claim they are planning to move abroad in the near future but never do.
The changes in the draft Statutory Instrument include:
- a requirement for an overseas scheme to report payments out of funds transferred from UK pension scheme even if it is no longer a qrops and enable the scheme managers to report that information electronically),
- a penalties regime for non-compliant former qrops,
- a system for scheme managers to re-notify HMRC that they meet the conditions to be qrops
- a relaxation of the benefits tax relief test for overseas public service schemes and pension schemes of international organisations.
Meanwhile, HMRC was forced to concede defeat over a Qrops case earlier in June, International Adviser reported, after the tax authority withdrew its case against a group of investors (ROSIIP QROPS) who had challenged HMRC’s earlier decision to delist the scheme and seek charges of up to 55% on their pensions.