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How will the new Overseas Transfer Allowance (OTA) affect pensions being transferred to a QROPS?
Overseas Transfer Allowance and Overseas Transfer Charge
A new Overseas Transfer Allowance (OTA) will be introduced for transfers to Qualifying Recognised Overseas Pension Schemes (QROPS) and will be equal to £1,073,100.
Where the total value of an individual’s transfers from registered pension schemes to a QROPS exceeds their available OTA, the excess will be chargeable to the Overseas transfer charge (OTC) at a rate of 25%.
The abolishment of the Lifetime Allowance Charge in the current tax year indicates that transfers to QROPS made before 5th April 2024, will pay significantly less or no tax compared to those made on or after 6th April 2024.
This presents a limited window of opportunity for individuals with pension funds exceeding the OTA to consider transferring to a QROPS.
We propose an immediate review for anyone with substantial UK pension funds that are in excess of the OTA.
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