Treasury closes pension loophole
A clause in a tax agreement with Hong Kong that would allow people to make tax free withdrawals from their pensions accounts has been amended by the government
THE GOVERNMENT HAS closed a loophole that allowed people to move their pensions abroad.
The Treasury took steps to prevent tax avoidance through the use of Qualified Registered Overseas Pensions (QROPS). This provision allows people who move overseas to liquidate their UK pensions.
But a clause in a tax agreement with Hong Kong, which comes into effect today, allowed people to move their pensions there while remaining UK resident. The Treasury became aware of this loophole and changed the legislation in the Finance Bill to amend this.
David Gauke, exchequer secretary said: ‘The government has set out a clear strategy on preventing tax avoidance. We will not hesitate to take action to stop those who seek to take unfair advantage of unintended tax loopholes. Today’s measure demonstrates our commitment to act quickly to close these.’
