What does the 2017 British Budget mean for your pension?

The UK 2017 spring budget was delivered yesterday, by Chancellor Phillip Hammond, and this post is simply to help you understand what has transpired, specifically with regards to UK pensions.

HMRC has levied a 25% tax charge on pension transfers away from the UK into QROPS (Qualifying Recognised Overseas Pension Schemes). However, there are exceptions. You will not have to pay the 25% charge if:

            . Your current employer sponsors the scheme

            . The QROPS is based where you reside

            . You and the selected QROPS are based within an EEA country.

The first two points are unfortunately not applicable for those with UK pensions based in Italy. HMRC recently removed ALL Italian QROPS as they did not meet their standards.

It is unfortunate that non-UK residents outside the EEA have been disadvantaged. However, Italy is inside the EEA, which means you still have a window of opportunity to move TAX FREE.

The UK government is just weeks away from triggering Article 50 which will give it the right to start stepping away from EU directives which are binding (QROPS fell out of an EU directive). The UK wants to claim back the taxing rights on UK sited assets and assets which were built in the UK. Once Article 50 is triggered then I would be as bold to predict that this tax will also be applied to other EEA states.

Therefore, I would recommend if you have  a UK pension, you’re based in Italy and have been considering a transfer, that you act now, and take advantage of the current opportunity while you still can. Time, and most certainly HMRC, is against us.

If you would like a consultation, please contact my associate, Zach Stafford, on the below number to book an appointment. Good luck and hope you make the right decision.

Colin Eldridge, DVI. Country Manager (Zach, +39 3926077552)