Asset Protection

HMRC updates overseas pension scheme list

By added on 16/09/2015

HM Revenue & Customs (HMRC) has updated its list of recognised overseas pension schemes (Rops), giving Australia three more, reports City Wire. 

In July HMRC slashed thousands of overseas schemes from its recognised list after it was revealed that overseas pension schemes the world over were being declared invalid by new tax rules that rendered them invalid if they allowed savers access to their benefits before age 55.

As a result of this Australia was left with just one pension scheme on the list – the local government superannuation scheme.

The list was then further bolstered at the beginning of September, with the addition of Australia's P Wyns Age 55 Super Fund.

As of this week, however, HMRC has added a further three Australian schemes to the Rops list: the Commonwealth Superannuation Scheme, the Locke Sinclair Retirement Fund, and the RBCT Superannuation scheme.

Ireland now has 77 Rops, France has eight, while the Isle of Man and Guernsey have 196 and 129 respectively. Some countries remain without provision, however, such as Barbados which has none. 

The changes follow new rules implemented by HMRC in April this year, which declared that overseas pension schemes had to pass a pension ‘age test’ in order to remain compliant.

In a bid to stop savers from ‘liberating’ their pensions by transferring abroad, schemes had to declare that they, or the rules of their country, did not allow benefits to be taken before age 55 unless members were affected by ill health.

HMRC imposed a 55 per cent charge on any unauthorised transfers into non-compliant schemes, prompting Australian schemes to seek clarity from HMRC regarding their status.

Australia was hit particularly badly as regulation down under does permit benefits to be taken early under strict rules governing destitution as well as illness.