From 6th April 2006, just about anyone with a UK pension can transfer to an overseas pension scheme – providing, of course, the overseas scheme is an approved QROPS (Qualifying Recognized Overseas Pension Scheme).
Since the Defined Contribution regime was introduced in the Finance Act 2000, an individual could make a UK pension contribution, on behalf of another individual, from 6th April 2001. These were known as Third Party contributions.
Also introduced in 2001 was the removal of the minimum age that an individual needed to be to become a member of a UK personal pension (or stakeholder).
Often taking advantage of these rules were grandparents or parents looking to make a contribution on behalf of a child. As a result, since 2001, there are many minors who have accrued pension funds.
It is often the case, that when a family migrates, all family members (including the children) would have accrued pension funds in the UK. Therefore, when Global QROPS Ltd are asked to advise about UK pension transfers to QROPS, the question arises about whether a child’s pension plan can transfer to a QROPS?
Theoretically, the answer to this question is ‘yes’. Her Majesty’s Revenue and Customs (HMRC) have not applied any restrictions on such a transfer (providing the receiving scheme is QROPS). However, there are plenty of considerations first.
For example, do overseas pension schemes have their own minimum age restrictions for pension membership? Is there value for the UK fund in being transferred to a QROPS (now or in the future)? – The answer to this could depend on factors such as the overseas pension scheme charges or the fund size.
Global QROPS Ltd are able to provide advice on all aspects of overseas pension transfers.
