The 'anti-forestalling' provisions in s.72 and Schedule 35 of this year's Finance Act have been extended to cover schemes established outside the UK.

Made under a power in para 20 of Sch 35, The Special Annual Allowance Charge (Application ot Members of Currently-Relieved Non-UK Pension Schemes) Order 2009 (SI 2009/2031) applies the new law to high-income individuals who are receiving UK tax relief on pension contributions to overseas schemes covered by Sch 34 FA 2004, for the 2009/10 and 2010/11 tax years. Thus the Order is retrospective although it came into force on 12 August 2009.

UK tax relief is available to migrant workers and their employers in the UK for contributions to schemes established outside the UK either

• under the migrant member relief provisions in Sch 33 FA 2004; or
• under double taxation arrangements; or
• where there was an entitlement before 6 April 2006 to corresponding relief for pension contributions under para 51 Sch 36 FA 2004 and under Art 15 SI 2006/572.

The Order also provides equivalent protections from the restrictions on tax relief for members of non-UK schemes, who became or become resident in the UK between 6 April 2006 and 5 April 2011, compared to those provided for individuals who remain UK resident throughout that period.

Certain overseas schemes, termed 'relevant non-UK schemes'*, are also the target of another recent set of regulations. The Pensions Schemes (Application of UK Provisions to Relevant Non-UK Schemes) (Amendment) Regulations 2009 (SI 2009/2047) came into force on 13 August 2009 although backdated to 6 April 2006.

* (FA 2004 Sch 34 para 1 (5)

A scheme is a relevant non-UK scheme if -

1. relief from tax has been given in respect of contributions paid under the scheme by virtue of Schedule 33 (overseas pension schemes: migrant member relief),
2. relief from tax has been so given at any time after 5th April 2006 under double tax arrangements,
3. a member of the scheme has been, or members of the scheme have been, exempt from liability to tax by virtue of section 307 of ITEPA 2003 (exemption for provision made by employer for retirement or death benefit) in respect of provision made under the scheme at any time after 5th April 2006 when the scheme was an overseas pension scheme, or
4. there has been a relevant transfer at any time after 5th April 2006 when the scheme was a qualifying recognised overseas pension scheme.

The regs modify the definitions of the different categories of authorised lump sums in Sch 29 FA 2004 in relation to relevant non-UK schemes. They ensure that, after the member has made an election deeming a BCE to occur under paragraph 15 of Sch 34 to the Act, the relevant non- UK scheme can pay lump sums without triggering the unauthorised payments rules.

Such an election allows an individual who leaves the UK permanently, and so stops receiving any UK tax relief, to crystallise their benefits under their relieved non-UK pension scheme. In this way they can determine whether or not they are liable to a lifetime allowance charge and can discharge any UK tax obligation at an early date rather than waiting for what might be many years until their benefits from that scheme actually crystallise (RPSM 131.02.570).

The Tax Avoidance Schemes (Prescribed Descriptions of Arrangements) (Amendment) Regulations 2009 (SI 2009/2033) come into force on 1 September 2009 and amend SI 2006/1543. The new regs require disclosure of tax avoidance schemes that specifically seek to avoid or reduce the restriction of pensions relief under the anti-forestalling provisions in FA 2009.