Contact

News & Insights

HMRC Pension Transfer Guidance May Change

A question of clarity for clients and their financial advisers

The difficulty for financial advisers when considering the current rules is that it can be difficult to predict when and under what circumstances HMRC might interpret a pension transfer as being intended to provide gratuitous benefit.

In some cases, advisers may, through fear of attracting a 40% inheritance tax bill for their client, be hesitant to recommend a pension transfer even if they believe the transaction may be suitable.

In other situations, financial advice clients may decide that consolidating their pensions into a single QROPS, SIPP or other scheme may be the better option when the ambiguity of the rules is taken into consideration.

A deterrent against sensible financial planning

While HMRC states they have pursued only a relatively small number of cases, there has been a sense among industry experts that it has done so chiefly to serve as a deterrent to those in similar circumstances and to present too greater risk in what might otherwise be construed as sensible financial planning.

One recent example is the Court of Appeal case, Her Majesty’s Revenue and Customs v Parry & Ors (also known as the Staveley Case). The case concerned the application of inheritance tax in relation to a pension transfer which was made during a time of ill-health.

The judge, overturning two earlier tribunal decisions, found in favour of HMRC, ruling that because the pension transfer had been made when the pension holder was terminally ill it should be treated as a “chargeable lifetime transfer” that had been made with the purposes of reducing the value of an estate.

It is anticipated that HMRC will publish its new guidance pending the outcome of an appeal in the Supreme Court, to be heard in 2020.

Blacktower Financial Management for expat transfer advice

Blacktower Financial Management works across Europe to help cross-border interested individuals protect, grow and manage their wealth.

One area in which we have particular expertise relates to expat pension transfers, including QROPS and SIPPs. If you would like to consider whether it is your long-term interests to make an expat pension transfer, contact us today so that we can review your pensions, assets and wealth management options.

For more information about how we may be able to help you, contact your local office today.

Disclaimer: Blacktower Financial Management is not a tax adviser and independent tax advice should be sought. The above does not constitute advice and Blacktower makes no recommendation as to the suitability of any products or transactions mentioned..

Related News

Expats can stay strong in face of Brexit

It may have been close run thing but the UK has voted to end its membership of the European Union and now is an appropriate time for all concerned to consider the implications.

Fortunately, and despite the atmosphere of doom and gloom that has seemingly engulfed the country since the result, there is no need for any particular panic or even urgency. The exit process is expected to be long and drawn out, and although most experts predict it as inevitable there is still some realistic prospect of a renegotiation, particularly in light of David Cameron’s resignation.

Read More

Will Writing, an Important Part of Expat Financial Planning

Ink pen and writingA full evaluation of your Will writing options should be an essential aspect of any expat financial services plan. If you have interests across two or more jurisdictions, whether they are business, investment, familial or lifestyle you need to be educated and aware of the implications that this can bring.

For example, when you have assets in both Britain and another country, it can be confusing to know whether you should write a single Will covering all the assets in both jurisdictions or whether you should write separate Wills: one for each jurisdiction in the language of that region/country.

Unfortunately, without expert legal and expat financial services advice, it may not be possible to answer the question with any confidence. You should consider all of the following:

Read More

Select your country

Please select your country of residence so we can provide you with the most relevant information:

You are currently viewing the Blacktower Financial Management EU website.

You may be looking for the Blacktower United States website.

Blacktower United States > X Stay on this site

Or choose your country.