Finance Act 2004

[F1244AOverseas transfer chargeU.K.

(1)A charge to income tax, to be known as the overseas transfer charge, arises where—

(a)a recognised transfer is made to a QROPS, or

(b)an onward transfer is made during the relevant period for the original transfer,

and the transfer is not excluded from the charge by or under any of sections 244B to 244H.

(2)Sections 244B to 244H are subject to section 244I (circumstances in which exclusions do not apply).

(3)In this group of sections, an “onward transfer” is a transfer of sums or assets held for the purposes of, or representing accrued rights under, an arrangement under a QROPS or former QROPS in relation to a member so as to become held for the purposes of, or to represent rights under, an arrangement under another QROPS in relation to that person as a member of that other QROPS.

(4)In this group of sections “relevant period” means—

(a)in the case of a recognised transfer made on 6 April in any year, the 5 years beginning with the date of the transfer,

(b)in the case of any other recognised transfer, the period consisting of the combination of—

(i)the period beginning with the date of the transfer and ending immediately before the next 6 April, and

(ii)the 5 years beginning at the end of that initial period,

(c)in the case of an onward transfer, the period—

(i)beginning with the date of the transfer, and

(ii)ending at the end of the relevant period for the original transfer (see paragraphs (a) and (b) or, as the case may be, paragraphs (d) and (e)),

(d)in the case of a relevant transfer that—

(i)is made on 6 April in any year, and

(ii)is the original transfer for an onward transfer,

the 5 years beginning with the date of the relevant transfer, and

(e)in the case of a relevant transfer that—

(i)is made otherwise than on 6 April in any year, and

(ii)is the original transfer for an onward transfer,

the period consisting of the combination of: the period beginning with the date of the relevant transfer and ending immediately before the next 6 April; and the 5 years beginning at the end of that initial period.

(5)In this group of sections “the original transfer”, in relation to an onward transfer, means (subject to subsection (6))—

(a)the recognised transfer in respect of which the following conditions are met—

(i)it is from a registered pension scheme to a QROPS,

(ii)the sums and assets transferred by the onward transfer directly or indirectly derive from those transferred by it, and

(iii)it is more recent than any other recognised transfer in respect of which the conditions in sub-paragraphs (i) and (ii) are met, or

(b)where there is no such recognised transfer, the relevant transfer (see paragraph 1(6) of Schedule 34) in respect of which the following conditions are met—

(i)it is from a relevant non-UK scheme (see paragraph 1(5) of Schedule 34),

(ii)it is a transfer of the whole or part of the UK tax-relieved fund (see paragraph 3 of Schedule 34) of a member of the scheme,

(iii)it is to a QROPS, and

(iv)the sums and assets transferred by the onward transfer directly or indirectly derive from those transferred by it.

(6)Where apart from this subsection there would be different original transfers for different parts of an onward transfer, each such part of the onward transfer is to be treated as a separate onward transfer for the purposes of this group of sections.

(7)In this section and sections 244B to 244N—

• “QROPS” means a qualifying recognised overseas pension scheme, and “former QROPS” means a scheme that has at any time been a QROPS;

• “ring-fenced transfer fund”, in relation to a QROPS or former QROPS, has the meaning given by paragraph 1 of Schedule 34;

• “this group of sections” means this section and sections 244B to 244N.]