IR SPSS published four new Pensions Updates late yesterday.

Pensions Update No 150 [PDF]: Pre A-Day Avoidance

Using a recently discovered strategy for double-funding substantial benefits in the run-up to A-Day as an example, the Revenue stress that schemes which seek to circumvent IR limits or exploit unintended features of the current regime will call into question the approval of the original scheme.

Pensions Update No 151 [PDF]: Revised Procedure for Claiming Tax Relief on Contributions to Overseas Pension Schemes (Corresponding Relief)

To claim corresponding relief, a form PS3008 has to be completed in respect of each member of an overseas scheme who is claiming relief on contributions. This provides IR SPSS with a declaration that the scheme corresponds, some information about the scheme and various details about the member.

The form has been shortened. From 6 April 2005, only the declaration that the scheme corresponds, supporting information, and the name(s) and reference(s) of the tax office(s) dealing with the tax affairs of UK based- members have to be provided to IR SPSS. Any other information in support of a scheme member's claim for relief on contributions should be sent to the claimant’s tax office.

An amended PS 3008 [PDF] is available on the Inland Revenue website. Part 15.18 of IR 12 has been amended to reflect the revised procedures. Schedule 33 to the Finance Act 2004 provides for migrant member relief to replace corresponding relief with effect from 6 April 2006. The migrant member relief conditions will be different to those that have to be met for corresponding relief. A new procedure will be devised for claiming migrant member relief in 2006/07 and subsequent years.

Pensions Update No 152 [PDF]: Amendments to Overseas Transfers Practice

Amendments to the rules for transfer overseas of contracted-out rights, made by the Contracting-out, Protected Rights and Safeguarded Rights (Transfer Payment) Amendment Regulations 2005 (SI 2005/555), with effect from 6 April 2005 remove the condition that the transferring scheme must establish that the member has permanently emigrated overseas.

"To tie in" with these changes made in DWP Regulations, IR SPSS overseas transfer practice will also apply to contracted-out/safeguarded rights with effect from 6 April 2005. One of those requirements - which will continue to apply - is that the transferee has left the UK on a permanent basis with no intention of returning to the UK to work or to retire.

IR 12 Appendix VI and IR 76 Appendix 22 have been amended accordingly. The Aries Pension System will incorporate these changes shortly.

Pensions Update No 153 [PDF]: Permitted Maximum

This Update explains the the increase to the permitted maximum under sections 590(3)(d) - currently £100,000 - and 590C - currently £102,000 - of the Taxes Act, and the allowable maximum under section 640A (£102,000).