HMRC Confirms Unauthorised Payment Status On USP Transfers To QROPS
Following the change to pension retirement (creystalisation) rules on 6th April 2010 where the minimum retirement age was inreased to age 55 from 50. There was some uncertainty as to whether or not there were unauthorised payment charges for those who claimed unsecured pensions benefits (USP) and then transferred the residual funds to a SIPP or QROPS and or implemented an income stream prior to attaining age 55.
A few weeks ago it was confirmed by HMRC that the transfer from the scheme in USP to another or to a QROPS was not an unauthorised payment, but any income drawn would be. HMRC have now revised their position on this and even the income payments paid from a QROPS (provided they fall within prescribed limits) will also not give rise to an unauthorised payment charge. This is good news for the many who fell into this category and had implemented their USP without considering this. HMRC have backdated this to 6th April 2010 also. Although the draft regulations confirming this will be released shortly, they have confirmed that transfers to QROPS arrangements and implementation of income streams that now go ahead will not be liable to an unauthorised payment charge.
I am sure HMRC meant not to cause or create any confusion here. It was simply a case of a mistake in the legislation with certain industry experts just making a mountain out of a mole hill!
If you are planning on emigrating, have UK pension benefits and think you may be able to benefit from a QROPS solution please do not hesitate to contact Andrew Hains (Senior QROPS Adviser) or Mark Jones (QROPS Pension Transfer Specialist) to discuss QROPS opportunities on 00 44 (0)1473 202072.
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