Back in the good old days, PC*, for an individual who was neither a controlling director nor a 'high earner' as defined in the Practice Notes, it was not normally necessary to contact the Revenue before transferring benefits overseas. There were some hurdles, certainly, set out in Appendix VI to IR 12; but generally speaking all you needed from the overseas scheme was confirmation of its country of establishment and that it was capable of receiving the transfer, plus evidence of authorisation/recognition by the overseas tax or supervisory authority.

*PC = Pre-Complification

During the gestation process of the new pensions tax regime, HMRC realised there would be scope for substantial tax losses if individuals were permitted to simply transfer benefits overseas on a similar basis. A fund worth £1.5m might be accessed entirely as a lump sum where in the UK only 25% was available as cash, for example. Hence we now have a panoply of new tests to be applied. To make a transfer overseas without risk of tax penalty or sanction, a transfer must be a 'recognised transfer', which requires the overseas scheme to meet three sets of conditions as a 'Qualifying Recognised Overseas Pension Scheme' (QROPS) under FA 2004 s.169 (2). In other words, before transferring overseas you need to know if the scheme is a QROPS.

HMRC decides whether a scheme is a QROPS, based on information supplied by the overseas scheme itself. One of the requirements of s.169 is that the scheme manager of a 'recognised overseas pension scheme' must have undertaken to comply with the information requirements imposed under regulation 3 of The Pension Schemes (Information Requirements - Qualifying Overseas Schemes, Qualifying Overseas Schemes and Corresponding Relief) Regulations 2006 (SI 2006/208), if the scheme is to be a QROPS.

For the first time, HMRC yesterday published a list of schemes which are QROPS, together with their country of establishment. Australia, New Zealand, the Isle of Man and the Republic of Ireland feature prominently. HMRC intends to update the list at the beginning of each month. Note, however, that this list is not necessarily complete: it includes only those QROPS which have consented to have their details published.

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