The changes, which take effect today, “are part of a Government-wide initiative, involving HMRC and other agencies” that are intended to “detect, disrupt and deter promoters” of such schemes, an HMRC spokesman said.
One of the changes will mean that schemes will no longer be able to begin receiving pension transfers as soon as they fill in an online registration form, but now must wait while their scheme is “risk assessed” by the authorities.
As reported, the UK’s Pensions Regulator and various other government agencies announced in February that they were planning an assault on companies that entice Britons to access, or “unlock”, their pension pots before the age of 55.
Some offshore schemes that invite people to transfer their pensions abroad are understood to be among those that the Government and Pension Regulator have in their crosshairs. This was confirmed today by the HMRC spokesman, who said HMRC is "monitoring all cases, whether within or outside the UK, extremely closely, and won’t hesitate to act where there is any abuse of the tax rules".
"The purpose of the QROPS regime is to enable people who leave the UK to take their pension savings with them to continue to save to provide an income for retirement," he added.
"It is not to provide for more tax relief than would be possible if the pension savings remained in the UK."
Some of the other key changes announced today:
- After an online application for registration has been submitted, HMRC may now request further information before deciding whether to register it; schemes will have 45 days to submit this information, otherwise their application will be rejected
- In order to carry out its obligations to “maintain the integrity of pensions tax relief”, HMRC is now able to give scheme administrators considering making a transfer of member’s pension funds information about the registration status of the receiving scheme, and not be obliged to obtain consent from the receiving scheme before doing so
- Confirmation of the registration status of a receiving scheme will only be provided where:
• The receiving scheme is registered with HMRC, and is not subject to a deregistration notice;
• HMRC doesn’t hold information at the time that would suggest “that there is a significant risk of the scheme being set up or being used to facilitate pension liberation” - Obtaining HMRC’s response should only be one of the checks undertaken by a scheme when considering whether to make a transfer; the transferring scheme “will still need to undertake further checks when deciding whether or not to transfer the funds”
To read more about the changes on HMRC’s website, click here.
To read about the launch of the campaign earlier this year to crack down on pension ‘liberation’ schemes, click here.
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