Business panel: Can I transfer UK pension scheme?
I’ve returned to Guernsey after 25 years of working in London. I have a UK pension scheme and if possible I’d prefer to have my pension with a locally based provider. Is it possible to transfer my UK pension scheme to a scheme Guernsey?
Sean Gillease, business development manager, Sovereign, replies:
Yes, it is possible to transfer from a UK- registered pension scheme to a suitable Guernsey pension arrangement.
However, this is a complex area and there are considerations to ensure that the transfer is an ‘authorised’ transfer and does not create any UK tax liabilities, both at the time of the transfer and going forward*.
Critically, the transfer would need to be made to a HMRC-listed Qualifying Recognised Overseas Pension Scheme (QROPS). This is an approved non-UK scheme that meets certain prescribed conditions set out by HMRC to receive an ‘authorised’ transfer from a UK-registered pension scheme.
It may be that your employer offers such a scheme. If not, you will need to look at transferring this to a Guernsey retirement annuity trust (RAT) scheme.
You could either establish a personal RAT which can be structured to meet the relevant QROPS conditions. The most significant condition is that the scheme must have a minimum retirement age of 55 to be consistent with UK rules (as opposed to age 50 under Guernsey rules.)
Some local pension providers offer multi-member RATS which are already listed by HMRC as a QROPS and so you can apply to join and a transfer should be possible immediately. This is usually a simpler and less expensive option.
It would be sensible for you to engage the services of a locally qualified financial advisory firm and they can assist with the process and provide you with specific advice.
* Transferring from a UK-registered pension scheme to a QROPS in Guernsey, for a Guernsey tax resident, will be paid free of UK tax.
However the individual must remain resident in Guernsey for at least a further five complete and consecutive UK tax years from the date of the transfer in order to not give rise to a 25% UK tax charge.
