Anti - Forstalling and QROPS - Good News !

Posted: 16 April 2010
Anti - Forstalling and QROPS - Good News !
For those of you familiar with this topic HMRC have relaxed the Protected Pension Input (PPIA) Rules. These came into force on 19th March 2010. The rules go a long way in permitting the switching of PPIA’s from one pension arrangement to another. These are summerised below and include the following conditions;-
 
  • The old arrangement can only be transferred to one new arrangement
  • The new arrangement has to be established within three months of stopping the old arrangement
  • Individuals can continue to have their regular contributions/accrual in the new arrangement at the rate under the old arrangement
  • The arrangements can be transferred to a QROPS (Qualifying Recognised Overseas Pension Scheme)
 
It is currently not possible to switch from a Group Personal Pension to an individual arrangement, or from an individual arrangement to a Group Personal Pension. Clarification is still awaited regarding the consolidation of multiple PPIA arrangements and switching arrangements within the same scheme.
 
The positive side this allows individuals to switch their pension arrangements with PPIA and continue to keep their higher tax relief. What the future brings with an election looming is difficult to say, however at least this facility looks as though it will be around until 5th April 2011, so watch this space. The higher tax relief amount and the pension fund can then (where appropriate) be transferred to a QROPS. In most circumstances the local rules of the jurisdiction any QROPS transfer is made to are more advantageous than the rules had the funds remained in the UK and not been transferred to a QROPS.
 
To recap, what is an individuals PPIA’s;-
 
  • The yearly amount of any money purchase contributions made on, or behalf of an individual (including employer and third party contributions) quarterly, or more frequently before the relevant date.
  • Any continued accrual or defined benefit rights (unless the scheme rules are changed on, or after the relevant date to increase benefits for less than 50 members
 
The relevant date is;-
 
  • From 22nd April 2009 this covers individuals with relevant income of £150,00 or more in the tax years 2007/08, 2008/09 or 2009/10 – or from
  • 9th December 2009 an individual has relevant income between £130,000 to £149,000 in the tax years 2007/08, 2008/09 or 2009/10, and those who become  a high income individual in 2010/11.
 
If you would like further information regarding Anti – Forstalling and QROPS please contact the QROPS adviser team at Offshore QROPS where one of our specialist QROPS pension advisers will gladly speak with you regarding the benefits of a QROPS transfer.


Back to news

Previous posts