IFAs with expatriate clients could get caught out if they rely on HM Revenue & Customs’ list of qualifying overseas schemes to decide where to transfer pension funds.
HMRC publishes a monthly list of “qualifying recognised overseas pension schemes” that have consented to having their details published for UK scheme administrators wanting to move clients’ pension funds abroad.
Although HMRC moved to clarify the situation in its latest Pensions Tax Simplification Newsletter, No 23, stating whether a transfer to a Qrops is permissible will depend on the legislation of the country in which it is established. It adds that transfers to US “qualified” retirement plans cannot be made from UK schemes.
But Standard Life marketing technical manager Andy Tully says most IFAs will not read the newsletter and says the warning should be placed prominently above the Qrops list. He says: “This is very confusing and has already caught some IFAs out. IFAs could lose their business if they try to process a transfer only to tell the client later that the transfer cannot take place.”