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Budget 2017 comment on QROPS tax charge

From 9 March 2017 certain transfers to and from a QROPS (Qualifying recognised overseas pension schemes) will be liable to a 25% tax charge called the overseas transfer charge.

This change means transfers to QROPS requested on or after 9 March 2017 will be taxable unless both the individual and the QROPS are in the same country after the transfer, or the QROPS and the individual are both in an EEA country, or the QROPS is provided by the individual’s employer.

Andrew Tully, pensions technical director, Retirement Advantage commented: ‘This appears to be a significant shutting down of the QROPS market, restricting overseas transfers to situations where people have an overseas employer’s scheme or the QROPS is in the EEA. The Government has been increasingly concerned about the use of these schemes for the past few years and this appears a major move to reduce their use.’