Guidance

Overseas pensions: stop being a QROPS

How qualifying recognised overseas pension schemes (QROPS) can lose their QROPS status and what former QROPS need to report.

• From: HM Revenue & Customs
• Published: 5 December 2016
• Last updated: 6 April 2017 — See all updates

Overview

If you manage a QROPS you must tell HM Revenue and Customs (HMRC) when you stop being a QROPS.

Former QROPS need to keep reporting information to HMRC about the payments they make or they’ll have to pay an initial penalty of £300 and a daily penalty of up to £60 until they provide this information. Schemes that lose their QROPS status after 13 April 2017 will also have to deduct the overseas transfer charge where appropriate.

When you need to tell HMRC

You need to tell HMRC:

• if you no longer want your scheme to be a QROPS
• when your scheme stops meeting the QROPS requirements

If your scheme stops being a QROPS, you must tell HMRC within 30 days of the change happening.

You’ll use form APSS251B to do this and report details about the pension savings held by your scheme.

If your QROPS status is removed by HMRC, you will still need to report details about the pension savings in your scheme that have UK tax relief. This will happen if:

• the scheme doesn’t have a manager
• you give false or incorrect information to HMRC
• you don’t report the required information to HMRC
• you don’t pay the overseas transfer charge when due

Effects of losing your QROPS status

Your scheme won’t be able to receive transfers from UK registered pension schemes or other QROPS free from UK tax. Individuals who want to transfer their pension savings into your scheme will have to pay an unauthorised payment charge of at least 40%.

Your scheme members won’t have to pay an unauthorised payments charge for their transfers if you received it before your scheme lost its QROPS status.

If your scheme stops being a QROPS from 6 April 2017, you should stop accepting transfers after 5 April 2017. Transfers from a registered pension scheme received by your scheme after this date will be unauthorised payments. Both the member and the transferring scheme administrator may be taxed on such transfers.

What you need to report

You have to tell HMRC within 30 days if you find that information you previously provided has changed, was incomplete or inaccurate. You can use form APSS251A to do this.

You must report it to HMRC if you’re still holding funds that have had UK tax relief. There are additional limits to all other reporting, which you only have to report if one of the following applies:

• the member is UK resident
• the member has been UK resident at any time in the 5 tax years before a payment for funds transferred before 6 April 2017
• for funds transferred from 6 April 2017, the member has been UK resident at any time in the period 10 years before the payment out of funds transferred

If you’re liable to the overseas transfer charge you must pay it to HMRC within 90 days of the day that HMRC tells you how to pay it.

Former QROPS

If you’re the scheme manager of a former QROPS, you also need to tell HMRC within 90 days:

• when you make a payment from a pension
• if your scheme transfers savings to other schemes
• whether the transfer is liable to the overseas transfer charge
• if your scheme purchases taxable property

Former QROPS managers also have to tell their members when they have flexibly accessed their pension.

Published 5 December 2016
Last updated 6 April 2017 + show all updates

1. 6 April 2017

   Amendments made following changes to the pension tax rules for overseas pension schemes, that take effect from 6 April 2017.

2. 8 March 2017

   Amendments to the guide to reflect the overseas transfer charges and reporting requirements.

3. 5 December 2016

   First published.