HM Revenue & Customs (HMRC) today announced a hefty tax charge for qualifying recognised overseas pension schemes (Qrops) transfers.
Qrops transfers will be hit with a 25 per cent tax unless both the individual and the pension savings are based in the same country, or within the European Economic Area or the Qrops is provided by the individual's employer.
The new measure comes into effect from tomorrow – 9 March 2017 – and was revealed in the documents accompanying the chancellor's Spring Budget.
If the pension fails to meet the new terms, the tax will be deducted before the transfer of the pension scheme.
HMRC 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."
