U.K. pension transfers

M

Marc

Registered User
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Just to update you, DWP (department of work & pensions) are about to change the rules on pension transfers from the U.K.

They are removing the statutory right to transfer on 30th November this year.


https://www.thepensionsregulator.gov.uk/en/pension-scams/dealing-with-transfer-requests#overseas

https://www.thepensionsregulator.go...y-guidance/db-to-dc-transfers-and-conversions

After this it is just going to be more difficult.

This on top of the Revenue change a few years ago which made transfers to anything other than a PRSA a train wreck waiting to happen due to the HMRC tax charge of 55% if you tried to retire benefits to an ARF within 5 years.

Marc Westlake
Chartered Certified and European Financial Planner
www.globalwealth.ie
 
This seems a bit cryptic. Can you clarify what this paragraph refers to? Is it a UK pension being transferred to an Irish ARF? Are you referring to the UK tax of 55% on funds in excess of the lifetime limit of £1millon or thereabouts? Presumably that only applies to those who are UK tax resident?

Or am I missing something here?
 
The charge also applies on an onwards transfer from a QROPS that is related to the original transfer and which occurs within the “relevant period”.
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The key date is the date of the transfer into the Irish QROPS. PTM113230 explains all this.
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If your ring-fenced transfer fund has a key date later than 6 April 2017, the unauthorised member payment charges will apply if a QROPS makes a payment that is an unauthorised payment even though the non-residence condition is satisfied.
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So transferring your QROPs funds in full or in part to an ARF within 5 years of the date the QROPS received that transfer will result in unauthorised payments.
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Marc said:
This on top of the Revenue change a few years ago which made transfers to anything other than a PRSA a train wreck waiting to happen due to the HMRC tax charge of 55% if you tried to retire benefits to an ARF within 5 years.
Click to expand...
There is differing opinions on this Marc. Some providers share your view, others don't.

I have clients who have invested in ARFs within 5 years of taking a QROPS transfer and there has been no issues with HMRC.


Steven
www.bluewaterfp.ie
 
My bad I should have put “source” on there

That is verbatim from HMRC that’s actually “their” view so I’d say technically your client owes tax
 
The life companies I used in these instances would have reported everything to the HMRC. These ARF's are in place a number of years and no one has come back looking for any tax payments. I am happy to trust that the technical depts of these life companies know what they are doing. If they tell me otherwise, clients will be advised otherwise.
 
Hi Steven

Who is liable for any retrospective losses to clients if HMRC do come looking?

Surely, if the client is going to be on the hook, he must be told?

Are you not responsible for the advice you provide? This reminds me of the thread from a few weeks ago aboit PRSA-AVCs where it seems that the legislation (Irish) clearly says one thing but industry practice is doing something else meaning that at some stage things could go very wrong!
 
Life companies have technical departments who's job it is to keep up to date with all of this legislation and rules. I have asked them if the can transfer in a UK pension and mature it immediately and transfer it to an ARF. They said yes. They wouldn't have done it if it was not allowed. They are also responsible for the reporting to the HMRC.

They are experts in this area and if they tell me they can do it, I trust them that they can.
 
So who makes good the client if something goes wrong?

Are the techies better informed than Marc who is giving the opposite advice?
 
In a principle and agent arrangement such as a broker and life company I'm fairly certain that it is the agent, the broker, that is providing the advice.

Also, having worked in technical services I also know that the "advice" is always given by the agent and never by the technical dept. For example, Life Companies don't stand over their own trust deeds and require advisers and their clients to seek independent legal advice.
Likewise, just because a life co facilitates a transaction doesn't mean that they are on the hook for it
As for footing the bill, that is why we are required by the Central Bank to hold Professional Indemnity Insurance
 
I think Marc's approach is much more reasonable.

Also, I don't like the the approach "if the insurance company says it's all right, then I'm happy that it's all right" especially when it is known that there is a potential issue.

I'd be much more comforted with someone saying....."this is why the insurance company is saying and this is why I believe that this is the correct interpretation".

I refer again to the PRSA-AVC example where it seems that the technical departments of insurance companies are relaxed about following what the legislation says!
 
"Brought" to this thread from new associated thread.

I'm a bit confused by the above to and fro.

Can anyone clarify/summarise what is/isn't allowed these days?
 
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