At Spring Budget 2017 the government announced that from 9 March 2017 a new 25% overseas transfer charge applies to some overseas pension transfers that were previously tax free.
You will still be able to make a transfer tax free if you are transferring to a qualifying recognised overseas pension scheme (QROPS) and formally requested your transfer before 9 March 2017 or one of the following apply:
- you are resident in the country where the QROPS receiving your transfer is based
- you are resident in a country in the European Economic Area (EEA) and the QROPS you are transferring to is based in another EEA country
- the QROPS you are transferring to is an occupational pension scheme and you are an employee of a sponsoring employer under the scheme
- the QROPS you are transferring to is an overseas public service scheme and you are employed by an employer that participates in that scheme
- the QROPS you are transferring to is a pension scheme of an international organisation and you are employed by that international organisation.
You will need to think about your circumstances and the overseas scheme to which you are transferring so that you know if your transfer will lead to the overseas transfer charge.
Your UK pension scheme administrator or overseas scheme manager will ask you for some information to help them decide if the overseas transfer charge applies to your transfer. If you do not give them this information, they will automatically deduct the 25% tax charge.
You cannot pay the charge yourself, instead if you make a taxable overseas transfer your UK scheme administrator or overseas scheme manager will deduct the 25% charge from your transfer fund.
You can find further information at GOV.UK