The new pension rules are leaving people open to possible retrospective tax charges, if their schemes are not compliant with HMRC rules.
The FTAdviser reports that Australian pension schemes could no longer meet the compliance definition to qualify as a registered overseas pension scheme after a letter sent by HM Revenue and Customs backdating new regulations brought in following pension access reforms.
The letter, dated 17 April and seen by FTAdviser, was sent to overseas schemes and backdates regulations to 6 April. Rules for qualifying recognised overseas schemes, or Qrops, were changed to ensure access rules were in line with those brought in in April under retirement freedoms.
HMRC states it is seeking confirmation from the schemes that they remain complaint with the rules. Failure to do so could mean transfers in are treated as unauthorised payments at hit with a retrospective 55 per cent tax charge.
It asks for specifications that either the country’s law prohibits access before the age of 55 or that the scheme rules have been amended to ensure they do not allow funds to be withdrawn before members reach this age unless due to severe ill health, in line with laws in the UK.
It won't be just Australian schemes that are being tested by HMRC.
Tax does have to be taxing.
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