Why has the Chancellor introduced this policy?
This new legislation is aimed primarily at individuals who retire in one country, but "park" their pension in a more tax-friendly location, such as an offshore tax haven. The UK Treasury commented, "This charge is targeted at those seeking to reduce the tax payable by moving their pension wealth to another jurisdiction."
The Chancellor of the Exchequer used his Spring Budget to announce that, with effect from 9th March 2017, pension transfers by UK residents to QROPS (Qualifying Recognised Overseas Pension Schemes) not in the European Economic Area will be liable for a 25% tax penalty. Philip Hammond said that this policy was being introduced in the interests of "fairness in the tax system."
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