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This Alert highlights the fact that penalty type charges may apply to members of overseas pension schemes assigned to the UK irrespective of whether or not UK tax relief is actively claimed under the provisions of a relevant double tax agreement or as Migrant Member Relief. Please ensure you are ready to deal with client queries about this prior to sending out the Alert. Please contact Rosemary Martin or Sarah Beard if you wish to discuss prior to despatch.
Key issues
- HM Revenue & Customs (HMRC) has issued guidance on how to claim relief on contributions to a US pension scheme under the UK/US double tax treaty. The guidance covers the procedures to be followed and outlines a change from previous years which will benefit many US employees assigned to the UK for a period of less than 3 years.
- The guidance also summarises the interaction between treaty relief for pension contributions and the application of potential penalty type charges under the UK’s new pension regime, which has been in force since 6 April 2006.
- Whilst the guidance is silent on the matter, this Alert highlights the fact that these penalty type charges have potential application to any member of any overseas pension scheme who comes to work in the UK.
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