By Portugal team
This article is published on: 27th November 2023
In his Autumn Statement, Jeremy Hunt announced the introduction of an Overseas Transfer Charge (OTC) when higher value UK pensions are transferred to a Qualifying Recognised Overseas Pension Scheme (QROPS).
This is to take effect from 6th April 2024.
The implication
Each individual will have an “overseas transfer allowance” of £1,073,100.
Where the transfer to QROPS exceeds this limit, the excess will be taxed at 25%.
The limit applies to the total value of transfers to QROPS, not per scheme.
For example. Mr A has 2 pensions valued at £900,000 and £600,000. He transfers both of these schemes to a QROPS after the new rules have been introduced. The excess above the lifetime limit is £426,900. This excess is taxed at 25%, therefore the tax due is £106,725.
The result
If you are considering a transfer to QROPS and your pension benefits are close to or exceed £1,073,100, this should be done before the introduction of the new rules in April 2024.
If you would like to understand how a transfer to a QROPS could benefit you or if it is appropriate, please do not hesitate to get in touch.
