Transferring an overseas pension to the UK

When an overseas pension scheme is transferred to the UK it is treated as if it is a UK pension.

Transfer requirements

Quilter’s requirements for transfers in from an overseas pension scheme are:

• The transfer must be in £ Sterling
• If the scheme is not a qualifying overseas pension scheme (QROPS), the adviser must carry out money laundering on the ceding scheme as the payer
• The ceding scheme must not have any requirements on how this transfer is treated when it is applied to our scheme (as the money will be treated the same as any other UK pension rights)

This means that we can’t accept a non-advised transfer from overseas pension schemes that are not QROPS, because a client can’t carry out the required money laundering.

The money laundering we would expect to be done would be the same level of money laundering that you would do on a corporate application.

Issues

The main difficulty we encounter with overseas pension transfers arises when the existing scheme asks us to indemnify them against any actions taken before the funds move to the UK. From our perspective, it is unreasonable for Quilter to be held accountable or liable for any issues that occurred while the previous scheme was responsible for administering the pension.

Previously used allowances

If a drawdown fund is being transferred to the UK, we will record both the lump sum allowance and the lump sum and death benefit allowance as £0. Any lifetime allowance used before 6 April 2024, or any lump sum allowance used after 5 April 2024, must be declared separately by the client for any future crystallisations. These figures will not be linked to the transfer, even if they relate to funds that originally came from the transferred money when it was previously held in the UK.