What are the IHT implications for an overseas transfer to a QROPS assuming a member remains UK domicile?
A. The transfer would not of itself be a chargeable occasion for IHT purposes. As a QROPS is not a UK registered pension scheme the funds in it will be caught by paragraphs 57 and 58 of schedule 36 to FA 2004 (and the transitional relieving provisions will not apply). If the funds have a UK source they will be “relevant property” for the purposes of the IHT regime in Chapter III, Part III IHTA. This means, broadly speaking, that there will be IHT charges on the current value of the funds every 10 years and on any payments of capital out of the scheme. If the UK domiciled individual died whilst entitled to a pension from the QROPS there could be an IHT charge on the funds being held in the scheme to produce that pension income.
