HMRC Proposed Changes to UK Pension Transfer
Rules Effective 6 April 2012
Her Majesty's Revenue and Customs (HMRC) has issued draft proposals affecting Qualifying Recognised Overseas Pension Schemes (QROPS) intended to take effect from 6 April 2012. Whilst only proposals at this stage, changes include extending the QROPS reporting requirements to 10 years from transfer. Existing reporting requirements are 5 full UK tax years from the member being non UK tax resident.
The HMRC are also proposing to restrict the lump sum available so that 70% of the initial transfer value must remain invested to provide an income for life.
We do not know at this point whether HMRC intends these changes to be retrospective or whether they will only affect transfers made after 6 April 2012. We can be certain of one thing, however: it is HMRC's intention to tighten QROPS rules and reduce the accessibility of funds after transfer so any changes will mean less flexibility.
If you have funds invested in a NZ Superannuation QROPS fund and have concerns as to how these proposed changes may affect you, please contact our office.