HMRC reveals QROPS transfer changes in 11th hour lifetime allowance abolition update

HMRC has revealed pension transfer to QROPS changes in an 11th hour lifetime allowance abolition update as part of a regular ongoing series of newsletters published by its Pension Scheme Services unit. 

This latest newsletter 158, published by HMRC’s Pension Schemes Services on 4 April on the cusp of the end of the UK tax year, has updated stakeholders on the latest news for public service pension remedy and lifetime allowance.

In early reaction, James Floyd, managing director at Alltrust Services Limited and group commercial director at The UAP Group said in a LinkedIn posting:  "Twas night before tax year, when all were in doubt… Bit of clarity on the eve of the biggest change since A-day."

The newsletter covers lifetime allowance (LTA) abolition, public service pensions remedy — impact of lifetime allowance abolition, pension remedies for MPs, MSs and members of the Northern Ireland Legislative Assembly — tax treatment of annual allowance and lifetime allowance

The new newsletter said: "From 6 April 2024, information to support you to implement the LTA abolition will continue to be included in regular pension schemes newsletters. Separate LTA guidance newsletters will also be published where required, but frequently asked questions (FAQs) will no longer be fortnightly. A consolidated copy of all FAQs published to date has been circulated to the LTA working group and will be published in a newsletter later this month.

"As highlighted in pension schemes newsletter 157, on 14 March 2024 the government made The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024. These are effective from 6 April 2024.

"The newsletter also confirmed that there would be further minor technical changes made through a second set of regulations. They will be effective from 6 April 2024 and, will not affect the vast majority of pension savers. They relate primarily to specific protections or to individuals who plan to transfer their pension savings to a qualifying recognised overseas pension scheme (QROPS)."

Newsletter 158 "sets out the changes which will be made, provides guidance on how schemes should operate during the interim period before these regulations come into force, highlights some further areas still under consideration".

To read the newsletter, click here.