By Ian Holloway, head of legislation and compliance at Cintra HR & Payroll Services
Where transfers of funds are made from a UK-registered pension scheme to an overseas one, that overseas scheme must be “recognised” by HMRC to maintain UK tax benefits.
HMRC publishes an updated list of overseas pension schemes that have told them they meet the necessary criteria to be a Recognised Overseas Pension Scheme (ROPS). The list only includes those ROPS that have asked to be included on the list – and therefore it might not contain all recognised schemes. That is why it is called a list of notifications, i.e. a list of ROPS that have been notified to HMRC for inclusion on the list.
It is important that people are aware of this list; however, is it really necessary for newsletters to advise payroll and pension professionals every time the list changes (though I accept that it does fill news space!)? Surely, the best way is to educate the relevant professionals so that they can access the relevant information for themselves – in fancy terms, I think they call this empowering professionals rather than spoon-feeding them.
So, as part of my drive to empower professionals, here are some basic facts:
• While an overseas pension scheme may appear on the ROPS list, HMRC is keen to point out that it cannot guarantee that transfers will be free of UK tax. To me, it does seem to cast doubt on whether this list is actually useful at all if “it is your responsibility to find out if you have to pay tax on any transfer of pension savings”.
• The list is updated on the first and 15th day of the month. If this date falls on a weekend or Bank Holiday, the list is published the following working day.
• The latest list was published on 1 June 2016 and can be accessed on the Gov.uk website’s List of Recognised Overseas Pension Schemes notifications. This link should be in everyone’s favourites list as it is constant. If you need the list according to a particular date, I would advise that you print it, as it is overwritten each time it is updated.
• The 1 June 2016 list has 13 schemes added and two removed. How do I know this information? Go to the above link and “See more information about this Guidance” and look for “Last updated” and “see all updates”.
• While it is useful to know that schemes have been added or removed, it is not so helpful if the names of the schemes are not detailed. Gov.uk seems a bit hit and miss when it comes to giving detailed information. Therefore, a tool that I find particularly helpful is the link right at the bottom of the page: “Is there anything wrong with this page?”
Or, am I wrong about empowerment and maybe professionals would still like to receive the twice-monthly newsletter advice? If that is the case, the newsletter needs to come with the above advice, namely that the list may not cover all ROPS and there is no guarantee that tax benefits are maintained, even if a scheme is on the list.
Posted on 1st June 2016 by Jerome Smail
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