The Government laid a statutory instrument on 13 March 2015, “The Overseas Pension Scheme (Miscellaneous Amendments) Legislation 2015”, which has temporarily delayed the replacement of the 70% rule, which is a condition that some overseas schemes need to meet in order to qualify as an overseas scheme or recognised overseas scheme.
This means that those schemes which have to meet this condition to be a QROPS will not be able to offer the full flexibilities that will apply to UK registered pension schemes until it is replaced.
The Government had intend to replace the 70% rule with one that required that the manager of the overseas scheme be regulated by a body where the scheme is established which regulates the management or provision of services by such schemes.
The Government is concerned that the proposed amendment would not ensure that the principles behind allowing transfers to QROPS, without the deduction of tax, can continue to operate as Parliament intended.
The Government’s policy intention was to allow individuals leaving the UK permanently to simplify their affairs by permitting them to take their pension savings with them to their new country of residence.
The Budget 2015 has provided no further clarity and we await further consultation.
If your Adviser has moved your Pension to an Australian QROPS, contact me now