The Government is planning a crackdown on qualifying recognised overseas pension schemes due to concerns some schemes are being used to circumvent UK tax rules.
HMRC has proposed a number of revisions to secondary legislation for the Finance Bill 2012 which will increase the reporting requirements for Qrops.
The changes include:
· the introduction of an acknowledgement by the individual, to be completed before a transfer is made, that tax charges may apply;
· the introduction of revised time limits for registered pension schemes to report transfers to Qrops;
· the provision of additional powers to HMRC to request information from a scheme manager of a Qrops;
· a revision of the time limits for the reporting of payments by a Qrops to HMRC.
HMRC says: “The Government has found that Qrops are being marketed extensively as a way of paying amounts or enabling the payment of amounts that are not allowed under UK rules (in particular 100 per cent lump sums) once the UK tax rules no longer apply.
“This is contrary to the policy rationale for allowing transfers of UK tax-relieved pension savings to be made free of UK tax to Qrops.”