Taxman expected to clamp down on expat pensions

Thousands of pensioners living abroad could be faced with a heavy tax bill as the Revenue is said to be planning to crack down on expat pension scheme allowances.

As many as 1,400 overseas pension schemes could delist from the government’s authorised overseas pension register if the Revenue clamps down further on the qualifying registered overseas pension schemes (Qrops).

Qrops, launched in 2006, have in some cases been promoted as a way to avoid buying an annuity and to avoid inheritance tax. The HMRC states that individuals can face tax charges of up to 55% of the sum transferred if the Qrops does not comply with UK tax rules.

As many as 80% of schemes on the Revenue’s list of registered Qrops – currently totalling more than 1,700 – could delist if found to fall short of the Revenue’s Qrops legislation.

A spokesperson at the Revenue said it was ‘looking carefully’ at the operation of transfers to Qrops and would act to counter ‘abuse’ where it found it.

However, the spokesperson could not confirm or deny whether the Revenue had experienced an increase in enquiries in recent months or whether it would be releasing further clarification documents in the near future.

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