Export a UK Pension

HMRC cannot restrict transfer of UK pension funds

HMRC rules specifically states that you do not need to leave the U.K. to transfer your pension funds. Which means the HMRC cannot restrict transfer of pension funds.

A transfer payment may be made either to the scheme administrator including persons responsible for administration of the QROPS, not just the trustees of this ORSO 402(b); or, where the receiving scheme for the member is to be an insured scheme, the scheme insurers, then to ORSO 402(b) (the usual route).

A Transfer Value is calculated according to The Pensions Regulators guideline and must be explained by the person presenting it to the member. Following the transfer, ORSO 402(b) will be required to provide benefits on a like for like basis as preceding the transfer.

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• No Need to Leave the U.K. to Transfer Out Your Group Pension Scheme
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• Transfer Out Group Pension schemes that are constrained by their investment policies.
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• No need to leave the U.K. to transfer out your pension
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• No tax on the way out, on the way in, in the middle or upon withdrawals

Transfer of a scheme pension in payment

So the transfer of a scheme pension in payment, for example, should be continued in that form, and the conditions as set out in HMRC’s RPSM14106030 should be followed.

If any of those conditions are not met the member of the receiving scheme will be liable to an unauthorised payments charge (see HMRC’s RPSM13102020). That will be the case, in particular, if a lump sum is paid, the scheme pension is increased or the income withdrawal is speeded up. Transferred pension fund money received by ORSO 402(b) cannot be topped up.

[box type=”tick” style=”rounded” border=”full”]Additional voluntary contributions of any description, including real estate, can be received by only if the member is in employment and sponsored by his employer who must sign.[/box]

No estate or inheritance tax

Members and their dependants can elect to defer benefit payments past first payment due date or on the member’s death. There is no reversion of the fund to the member’s deceased estate except by default where the member has no dependants or relatives. Therefore, no estate or inheritance tax.

Allows 100% drawdown

Together with Modern Portfolio Theory, at, for example, age 60 with a life expectancy of 25 years, the portfolio should be weighted 70% to liquidity and 30% to less liquid capital growth. The 70% tax law rule is clear – life means life and not life style. This ORSO 402(b) is designed to allow 100% drawdown of capital and income during a member’s lifetime with the option of leaving a capital residue for the member’s spouse and dependants.