Overview

You must tell HM Revenue and Customs (HMRC) about pension transfers from your QROPS that have received UK tax relief. You also need to provide information to the scheme manager or administrator who is receiving the pension.

You still need to report this information if you manage a former QROPS.

Your pension scheme can lose its QROPS status if you don’t provide this information within the time limit. Former QROPS may get an initial penalty of £300 and a daily penalty of up to £60 until they provide this information.

What to report to HMRC

You need to tell HMRC about any pension transfers from your scheme within 90 days if the scheme member either:

• is a UK resident or has been a UK resident in the previous 5 tax years
• first transferred their pension savings into your scheme in the last 10 years

Use form APSS253 to do this.

What to report to the new scheme manager or administrator

You need to give information to the new scheme manager or administrator if the member is a UK resident or has been in any of the last 5 tax years.

You must tell them within 91 days of the transfer from your scheme if you’ve:

• paid the member a lump sum payment from their pension savings known as an ‘uncrystallised funds pension lump sum’
• started paying from pension savings that have been invested to give an adjustable income (known as a ‘flexi-access drawdown pension’)

Transfers to another QROPS

You must also tell the new QROPS manager within 91 days of the transfer:

• whether the pension was transferred to your scheme from a UK registered pension scheme or another QROPS, and if so the date
• the value of pension savings that remain from the original transfer into your scheme (this will be the value of the original transfer if you haven’t made any payments from the pension savings)
• the amount of any pension savings that have received UK tax relief since you started managing it

Transfers into your scheme

You don’t need to report transfers into your scheme, but HMRC might ask you for information about the pension savings you’ve received.

Overview

Your members and their employers can claim tax relief on their pension contributions if the member moves to the UK after joining your scheme. This is known as migrant member relief.

Your scheme needs to be a QOPS for your members to get tax relief. The scheme must:

• be an overseas pension scheme
• report certain information to HM Revenue and Customs (HMRC)

Overseas pension schemes

Your scheme must be based outside of the UK and can’t be a registered pension scheme. It must also meet the following rules.

The tax recognition test

Your scheme must be:

• open to residents in the country your scheme was set up in
• registered with the country’s tax authority as a pension scheme

Your scheme’s country must have a system to tax personal income and give tax relief on pensions. The country (except for Australia) must only give tax relief on either:

• pension contributions
• payments out of the scheme

Australian pension schemes must be complying superannuation plans.

The regulatory requirements test

Your scheme must be regulated by a pension scheme regulator in the country your scheme is run from.

If a regulator doesn’t exist in your country for your type of pension scheme, your scheme must either:

• be based in the EU, Norway, Iceland or Liechtenstein
• have rules to make sure that:
  • at least 70% of pension savings that have received UK tax relief are used to pay a pension for the life of the member
  • pensions can’t be paid before the age of 55 unless the member has retired because of ill-health

International organisations

There are different rules for pension schemes run by international organisations, like the EU or UN.

To be an overseas pensions scheme, these schemes must:

• have rules that at least 70% of each member’s pension savings are used to pay a pension for the life of the member, if the savings have received UK tax relief
• not make pension payments to members before the age of 55 unless the member has retired because of ill-health
• not be a registered pension scheme
• be based outside the UK

Information your scheme must report

You must to tell HMRC about ‘benefit crystallisation events’ for migrant members of your scheme. Use form APSS252 to do this.

Benefit crystallisation events occur when the member:

• starts taking a regular income from their pension savings before they’re 75
• gets an increase in the annual pension payments they’re receiving, which is more than the greater of:
  • the retail price index
  • 5% of the previous year’s pension payment
  • £250
• buys a lifetime annuity before their 75th birthday
• puts their pension savings into a fund before their 75th birthday that can be accessed at any time (known as a ‘drawdown’ pension)
• reaches their 75th birthday with pension savings that haven’t been accessed
• reaches their 75th birthday with money left in a drawdown pension
• dies before their 75th birthday and within 2 years their uncrystallised pension savings are used to pay a lump sum death benefit or a pension to their beneficiaries
• transfers their pension to a qualifying recognised overseas pension scheme
• is paid a:
  • pension commencement lump sum
  • uncrystallised funds pension lump sum
  • serious ill-health lump sum
  • lifetime allowance excess lump sum
  • stand-alone lump sum
• is overpaid a lump sum because of an error calculating their pension entitlements
• didn’t begin taking their pension before they died because you couldn’t confirm they were entitled to their pension (for example, you couldn’t contact them)
• wants to test their pension savings against the lifetime allowance before they start taking a pension or their 75th birthday

When you report a benefit crystallisation event you also need to tell HMRC if the pension savings have been used to get:

• a flexible access drawdown pension
• an uncrystallised pension lump sum
• a flexible lifetime annuity

You should also tell HMRC if you agree to pay a member’s annual allowance tax charge – using form APSS210.

Tell HMRC you’re a QOPS

To be a QOPS, you must tell HMRC that your scheme:

• is an overseas pension scheme
• will report information on pensions that have received UK tax relief

You can use form APSS250 to do this.

When you’ve given HMRC the required information they’ll send you a letter, which will include your QOPS reference number.

You must make sure your scheme meets the rules to be a QOPS at all times if your members want to receive tax relief on their contributions.

When you stop being a QOPS

You must tell HMRC if your scheme stops being a QOPS.

HMRC can also decide your scheme isn’t a QOPS if you don’t report the necessary information to HMRC.

Any pension contributions you receive from migrant members after you stop being a QOPS won’t receive UK tax relief.