The government has made a change to the tax treatment of some transfers to a qualifying recognised overseas pension scheme in the Autumn Budget 2024.
As it stands, the overseas transfer charge is a 25 per cent tax charge on transfers to Qrops, unless an exclusion from the charge applies.
The exclusions currently apply if:
- the individual and Qrops were resident in the same country,
- the individual and Qrops were both resident in a country within the EEA/Gibraltar.
From today (October 30), the government has removed the second exclusion.
Doing this will help to ensure that some UK residents do not benefit from a double tax-free allowance whilst remaining in the UK.
Andrew Tully, technical services director at Nucleus, said: “The need for this Qrops change follows on from the abolition of the lifetime allowance.
“The overseas transfer allowance does not interact with the lump sum allowance, meaning someone within the UK may be able to get double tax-free cash by using a Qrops.
“It’s a reminder of how poorly the abolition of the lifetime allowance has been implemented that we still need further regulatory change six months later.”
amy.austin@ft.com
