Adviser > Technical Central > Pre simplification > Occupational > Pensions Update 148 - Overseas Transfers
Pensions Update 148 - Overseas Transfers
The content of this page is based on our understanding of how pensions worked before A-Day, the 6 April 2006, and is provided for reference only.
On A-Day (6 April 2006) a new set of simplified regulations will be introduced for all types of registered pension schemes.
One of the features of the new Regulations is that full membership of UK registered pension schemes will be allowed to any person, whether they are resident in the UK or not. It will be possible for somebody who is seconded overseas to remain in, or to become a member of, a registered pension scheme no matter how long they are away from the UK. Although membership will be open to anybody, tax relief will not always be available.
HM Revenue and Customs (HMRC) published Pensions Update 148 on 22 September 2004 introducing immediate changes for occupational pension schemes. The changes introduced are in anticipation of the new Regulations. HMRC has not changed the rules for personal pension schemes. A link to the update is below:
Previous rules
If an employee was seconded abroad to work for an overseas employer and chose to remain in a UK approved occupational pension scheme, certain conditions had to be met. One of the conditions was that the employee's secondment overseas could not exceed 10 years.
New rules with effect from 22 September 2004
Subject to certain conditions, employee’s who are on secondment overseas and who are member’s of an occupational pension scheme can continue to be a member of the scheme even if they have passed the 10 year limit, or will pass it before 6 April 2006. The conditions can be found below:
As a reminder, the current rules for personal pensions are as follows:
If somebody is seconded overseas and they have no net relevant earnings in a tax year they can still contribute to a personal pension scheme in that tax year if one of the following conditions apply:
- at some time in the tax year they were resident and ordinarily resident in the UK, or
- at some time in the previous five tax years they were resident and ordinarily resident in the UK and were resident and ordinarily resident in the UK when they set up the plan, or
- they are a Crown servant or the spouse of a Crown servant serving abroad.
The information provided is based on our current understanding of the relevant legislation and regulations and may be subject to alteration as a result of changes in legislation or practice.
This information is based on our current understanding of the Pensions Act 2004 and the Finance Act 2004 and may be affected by future changes in legislation.
Updated 20 October 2005
Published 27 October 2004
For professional advisers only
