At the 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. This will affect members of pension schemes requesting to transfer their pension to an overseas pension scheme.
You will still be able to make a transfer tax free if you are transferring to a qualifying recognised overseas pension scheme (known as 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 cannot pay the charge yourself, instead if you make a taxable overseas transfer your UK pension scheme or overseas pension scheme will deduct the 25% charge from your transfer fund.
If you are requesting a transfer to a QROPS you will need to complete a form (an APSS263 form) within 60 days of your transfer request. The Avon Pension Fund will need this information to determine whether your transfer is liable to the overseas transfer charge. HM Revenue and Customs may ask to see this. If this is not provided within 60 days of a transfer request, the transfer will be subject to the overseas transfer charge and a transfer charge must be deducted before making the transfer.
The government has published guidance on this at https://www.gov.uk/government/collections/overseas-pension-schemes
The APSS263 form can be found at https://www.gov.uk/government/publications/pension-schemes-member-information-apss-263