In a recent newsletter, HMRC has provided information about how its efforts to combat pensions liberation are working. This follows the changes made in October 2013 to strengthen existing processes, both in terms of how new applications to register pension schemes are dealt with and how requests for information about the tax status of a receiving scheme for a proposed transfer are addressed.
The key points noted by HRMC in its recent newsletter:
- On receipt of a new application for a pension scheme registration, HMRC will review the application to make a decision on whether or not to register the pension scheme (previously, the process was automatic). HMRC may well then request further information to help it make its decision, and the application will be rejected if the information is not received within 45 days.
- Although too early to give a definitive indication, applications for registration over the period from 21 October 2013 to 30 January 2014 have dropped by nearly a half.
- In relation to pension scheme transfers, HMRC will respond to requests for confirmation of the registration status without seeking consent from the receiving scheme. However, HMRC notes that it will only confirm registered status if its information indicates that there is not a significant risk that the scheme was set up, or is being used, to facilitate pension liberation.
- Any suspected pensions liberation cases should be notified to HMRC, which may lead HMRC to de-register the pension scheme.